Keppel’s property division has been the main contributor of earnings for the past two years. For the first quarter of 2019, the property division moved 390 homes, up from the 300 units sold over the same period in 2018.
Keppel Corp enjoys huge overseas landbank unlocking potential, with three million sq m of remaining residential areas for sale in China – mainly in Shanghai, Wuxi, Chengdu and Tianjin.
“Assuming average selling price per sq m of RMB10,000 (S$2,000), the gross development value is around RMB30 billion (S$5.9 billion). Of the 21,584 remaining units for sale in China, about 8,500 are ready to be launched from 2019 to 2021,” said RHB analyst Leng Seng Choon.
In fact, Keppel eyes to launch 2,000 housing units in China this year.
He noted that Keppel’s property division has been the main contributor of earnings for the past two years.
“In FY2018, 99 percent of EBIT was from its property development division, whilst the offshore marine and investments divisions were in the red due to the challenging market.”
For the first quarter of 2019, the property division moved 390 homes, up from the 300 units sold over the same period in 2018.
The analysts revealed that most of the homes “were sold in China, mainly in Wuxi”. Moreover, all 271 unit in Phase 1 of its new Nanjing residential project were sold during its launch in mid-April.
With this, the group is expected to continue to “source for further growth in the China property market, with focus on high growth areas namely, Jing-Jin-Ji, Yangtze River Delta and Greater Bay Area, which possess ample room for further value unlocking through property and township developments”, he said.
“With an estimated combined GDP of USD5.9 billion, we believe fundamentals of the property market of group’s focus areas are still intact and will still provide the growth sustainable return on investment in the foreseeable future.”
Fiona Ho, Digital Content Manager at PropertyGuru, edited this story. To contact her about this or other stories, email fiona@propertyguru.com.sg
