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In recent weeks, property veteran Kwek Leng Beng has seen positive signs in the property market.

They have come in the form of text messages about rising unit sales from City Developments (CDL) group general manager Chia Ngiang Hong.

Mr Kwek, CDL executive chairman, said: “It shows that the market is moving. Every week, Mr Chia sends messages where I see sales move up from five to 10 to 30, 50 units. It’s a good indication. I’ve also noticed the high-end sales have been moving quite steadily, and at the low-end showrooms, people have been crowding around.”

Mr Kwek was speaking at CDL’s second-quarter results briefing held at M Hotel Singapore yesterday.

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Despite his growing confidence in the Singapore market, he noted that developers are constrained by Qualifying Certificate penalties for unsold homes, “especially foreign developers, and even developers listed on the stock exchange with only one foreign shareholder”.

Mr Kwek said: “Such penalties are heavy and erode all profit. I hope the Government reviews them again to steady the rate of growth in terms of price increase.

“If not, you can see every bid (for land) now is higher and higher than ever. Land is akin to raw material for a factory, and if we don’t have that, the factory will be doing nothing. Therefore, there’s no choice but to bid for the land. If you put in a cheaper bid because you think it’s the right price, you’ll get nothing.”

CDL's upmarket freehold condominium Gramercy Park contributed to the company's earnings. CDL executive chairman Kwek Leng Beng noted that developers are constrained by Qualifying Certificate penalties for unsold homes and hopes the Government will re
CDL’s upmarket freehold condominium Gramercy Park contributed to the company’s earnings. PHOTO: CITY DEVELOPMENTS ST FILE PHOTO

He noted CDL managed only one successful bid in Singapore last year and urged for a closer look at rules to prevent a bubble.

CDL also announced that chief executive Grant Kelley, 52, resigned on Thursday and will return to Australia, where he will be chief executive of a Melbourne-based listed firm. He oversaw CDL’s diversification strategy which started in 2014. That includes investing in five key overseas markets and raising funds under management through the group’s profit participation securities initiatives or traditional private equity structures.

Mr Kelly’s last day is Dec 31, and deputy chief executive Sherman Kwek, 41 – son of the executive chairman – now CEO-designate, will take over on Jan 1 next year.

CDL’s second-quarter net profit fell 17.9 per cent to $109.9 million for the three months ended June 30, while quarterly revenue fell 21.8 per cent to $854.1 million.

The firm said this was owing to the absence of contribution from Lush Acres executive condominium, which was completed in the quarter last year.

Its residential developments here, such as upmarket freehold condominium Gramercy Park, as well as joint-venture projects like The Venue Residences – which has been fully sold – contributed to earnings.


  • Q2 REVENUE: $854.1 million (-21.8%)

  • Q2 NET PROFIT: $109.9 million (-17.9%)


The occupancy rate for CDL’s office portfolio was healthy at 96.4 per cent as at June 30, and the firm is working on a $60 million enhancement of its office property Republic Plaza.

Mr Kelley said the firm has made acquisitions of about $1 billion so far this year, and $3.5 billion in investments since 2014, including taking an equity stake in Distrii, a Chinese co-working space operator – which will also open in Singapore by the second half of next year – and buying a site in Tampines Avenue 10.

Quarterly earnings per share was 11.4 cents, compared with 14 cents a year ago. Net asset value per share was $10.25 as at June 30, compared with $10.22 as at Dec 31.

The firm declared a special interim dividend of 4 cents per share to be paid on Sept 13.

CDL shares closed 53 cents down at $11.14 yesterday, after the earnings were announced.

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