City Developments (CDL)

I was reading the balance sheet of City Developments, then I realized that, the PPE of CDL was lower than the PPE of M&C in the same currency during the same period.

for the financial year end in Dec 31th, 2010.

M & C : Property, plant and equipment £m 2,185.7

CDL: Property, plant and equipment $'000 3,410,448


using approximately GBP/SGD = 2, PPE of M & C would be more than 4 billion, but CDL only had 3.4 billion PPE. how does the consolidation of balance sheet of subsidiaries work? Even the elimination can't reduce the number. Does that mean certain entity within the group has negative PPE?


Anyone has any idea?

Extra extra, "REIT" all about it!

The Straits Times
www.straitstimes.com
Published on Apr 05, 2013
CDL may form Reit with its retail assets: StanChart

By Melissa Tan

DEVELOPER City Developments (CDL) could spin off its retail properties into a listed investment trust to help it offset the tough operating climate here, say Standard Chartered analysts.

They point out that the purchase last year of the Jungceylon mall in Phuket makes the move far more viable.

CDL's retail portfolio already includes other Thai properties, the Palais Renaissance in Orchard Road and City Square Mall in Little India.

The Jungceylon mall brings its retail holdings to around 1.7 million sq ft of space in Singapore and Thailand - large enough to potentially list as a retail real estate investment trust (Reit), the StanChart analysts said.

"We found in our recent meeting with CDL management that the company was rethinking some of its strategies as the operating conditions and regulatory environment in Singapore become more challenging," they noted.

CDL did not disclose the total value of its retail properties but StanChart analyst Regina Lim told The Straits Times that it was likely to exceed $1 billion.

The total value of its investment properties was $2.9 billion as at Dec 31 last year, according to its 2012 financial statement.

CDL recently announced that it would focus more on overseas opportunities.

Chairman Kwek Leng Beng told the group's full-year results briefing in February that CDL would look for new platforms and growth opportunities that would give it a balanced and diversified portfolio both domestically and internationally.

CDL effectively owns 49 per cent of the freehold Jungceylon mall, which has a site area of 940,324 sq ft.

Tenants at the four-storey complex near Patong Beach include department store Robinson, which is separate from the Robinsons store here, and hypermarket Big C Extra.

The 16-storey Palais Renaissance, a retail and office complex in Orchard Road, has a site area of 29,159 sq ft while the 11-storey City Square mall at the junction of Serangoon and Kitchener roads occupies 160,597 sq ft.

Both buildings are freehold.

CDL also owns the 99-year leasehold Central Mall at Havelock Road, which is a cluster of conservation shophouses, and some freehold strata units in the Tanglin and Katong shopping centres.

Part of the four-storey Mille Malle shopping mall in Sukhumvit Road in Bangkok is also in its portfolio.

The option of forming a Reit is gaining traction among local firms.

Real estate group Overseas Union Enterprise (OUE) said last month that it was in preliminary discussions with banks over a Reit listing on the Singapore Exchange mainboard.

This followed a Reuters report that OUE had chosen three banks as advisers for a US$800 million (S$990 million) listing of a hospitality Reit.

Unnamed sources cited in the report said they expected the initial public offer in the second half of the year.

Media group Singapore Press Holdings had said last month that it was exploring setting up a Reit to be listed here.

StanChart said yesterday that its target price for CDL was $12.10.

CDL shares have fallen 14 per cent from $12.99 on Jan 2 and closed five cents down at $11.21 yesterday.

melissat@sph.com.sg

I read this research note by CIMB on City, I almost fell off the chair laughing at the CFA work...

City moving into London property is a very positive news. Hotel assets globally are usually located in prime locations, for City to start unlocking value in a city that has seen massive asset inflation can only be a good thing to City shareholders.

Kwek's M'sian cousin is also privatising Guoco Holdings. Guoco Holdings controls G Leisure that has a huge portfolio of under yielding prime hotel assets. Quek is just waiting, leaving mkt running out of stamina before moving in on G Leisure to privatise it. When Quek keep it all private, then we can expect these shrewed guys to work wholly for themselves.






14 May 2013
Singapore
Company Results Note
City Developments |PDF

Collapse of hotel segment
CIT SP /CTDM.SI| NEUTRAL - Maintained | S$11.60 - Tgt.S$11.19
Mkt.Cap: US$8505m | Avg.Daily Vol: US$9.26m | Free Float: 54.70%
Property Devt & Invt | Author(s): Donald CHUA,

________________________________________
▊ CityDev announced a weak set of 1Q13 results because of the collapse of its hotel PBIT. It remains to be seen if it recovers in subsequent quarters. There are plans to enter the London market but this move is unlikely to change our Neutral stance at this juncture. 1Q13 core earnings were below expectations, at 15% of our full-year forecast and 13% of consensus. We scale back our FY13-15 core EPS by 3-12% for lower hotel earnings and trim our target price (15% discount to RNAV). We believe that a fresh business model may be needed before investors can be tempted to turn positive again.

Hotel segment collapses
Group revenue in 1Q13 fell 10% yoy, with pretax profit down 14% as hotel earnings collapsed. A combination of factors including the ongoing refurbishments which resulted in the temporary closure of rooms, regional geopolitical tensions in Korea as well as harsh weather conditions in Europe and the US dented occupancy. This was at the M&C level. In Singapore (CDLHT), lower corporate travel, rising room supply and a reduction in foreign labour quotas also put pressure on costs and occupancy. Overall, PBIT from hotel operations fell 35% yoy in 1Q13.

Residential sales
CityDev continues to work down its inventory in Singapore. With buying interest in the mass-mid segments still strong, it plans to launch a few projects in 2H13 – Jewel @ Buangkok, an EC at Fernvale Link and a mixed development at Up Serangoon Road/MacPherson Road. All these should still see favourable take-up though pricing and margins are unlikely to excite. The bulk of its unsold inventory still lies in the high end, a segment that remains subdued.

London calling
CityDev is planning to enter the London property development market, committing around ￡250m-300m for this. Details are still sketchy. The group has the relevant experience in London, having been there for 20 years via M&C. However, we believe this move is unlikely to excite the market until tangible results are produced.

LUSH ACRES – CDL’S NEW EXECUTIVE CONDOMINIUM OVER-SUBSCRIBED IN OPENING WEEKEND
http://media.corporate-ir.net/media_file..._Acres.pdf

BUYERS SNAP UP 76% OF UNITS AT LUSH ACRES LAUNCH
– CDL’S NEW EXECUTIVE CONDOMINIUM OPENS WITH A STRONG SHOWING

http://ir.cdl.com.sg/phoenix.zhtml?c=607...ress&nyo=0

the way I see:
i) these two highly educated professionals seems to be playing dirty plank - under declaring their income to qualify for EC?
ii)seems to me based on my personal experience accountant is quite a crafty cunning professional?
iii)a lot of questions - is there such agreement for developer to refund part of booking fee to the buyers? i tot booking once paid is usually not refundable?
iv) they open their shark jaw wide - seeking more than $1 million for the lost opportunity to buy another EC when they under declared income in the first place.

Thursday, Oct 24, 2013
Selina Lum
The Straits Times
A couple has sued a developer claiming they had been misled into buying an executive condominium (EC) with a floor area of 167 sq m when in fact the unit had a floor area of only 147 sq m.

The penthouse unit at Blossom Residences in Bukit Panjang has a second-floor rooftop terrace over the first floor except the living and dining area, which has a high ceiling of 4.2m.

The 20 sq m area in question is the empty space not taken up by the rooftop terrace.

The couple, who paid $56,050 for an option to purchase the $1.1 million unit, have sued condo developer Grand Isle Holdings, a subsidiary of City Developments Limited (CDL), for damages.

Mr Toh Her Chiew, 42, an IT manager and Madam Ling Mee Chow, 43, an accountant, are seeking more than $1 million for the lost opportunity to buy another EC as their income now exceeds the $12,000 eligibility ceiling.

However, the developer maintains that there was no misrepresentation on its part.

"As a reputable developer, it takes a serious view of the allegations and will vigorously defend these claims," said a CDL spokesman in a statement.

The developer notes the couple had under-declared their combined income by $370 when applying to buy the EC.

CDL says its marketing agent had highlighted to the couple that the unit came with a high ceiling over the living and dining area; this was also reflected in the sales brochure.

The developer says the option to purchase signed by the couple clearly stated the area of 167 sq m included the air-conditioner ledge, roof terrace and void.

An eight-day hearing into the case is scheduled to start on Wednesday in the High Court.

In September 2011, the couple visited the sales gallery for the EC, planning to upgrade from their five-room HDB flat.

They decided to buy the penthouse unit, paid $56,050 as the booking fee and signed an option to purchase.

About two months later, the couple complained.

They say they learnt about the void space only after going through documents that were sent to them together with the sales and purchase agreement.

The couple decided not to exercise the option to purchase. As per their agreement, the developer refunded them 75 per cent of the booking fee, which came to about $42,000.

In their lawsuit, the couple allege that the sales agent from ERA Realty Network, hired by the developer to market the condo, had misrepresented to them that the unit had a "built-in area" of 167 sq m.

The couple, represented by Mr Vijay Kumar Rai, say that the agent hid or omitted to mention the existence of the void space, which made about 12 per cent of the unit's total area unusable.

The developer, represented by Senior Counsel Ang Cheng Hock, says the agent did not use the term "built-in area" but told the couple the "size" of the unit was 167 sq m, which was true.

CDL is now seeking the return of the $42,000 which it had refunded to the couple, on the grounds that they had falsely declared their income.

I don't see how they can win this case against CDL. It is interesting how CDL is so sure about they under declaring their income

I think the couple do have a point. Do you think a double height room should be advertised as having twice it's single floor square footage despite the 2nd floor being unusable void space? Is it industry convention to market double height rooms in this manner?

(26-10-2013, 01:02 PM)Clement Wrote: I think the couple do have a point. Do you think a double height room should be advertised as having twice it's single floor square footage despite the 2nd floor being unusable void space? Is it industry convention to market double height rooms in this manner?

Hi this practise has been around for many years.

Some old condos I have seen have high ceilings and thus their floor area is less than what it is suppose to be. Example a "2 storey unit" can be actually only a single storey unit. Thus according to records, its floor area is stated to be 150 sq m. But if you go into the actual unit itself, you will notice the floor area is 132 Sq m.

(25-10-2013, 08:41 AM)egghead Wrote: I don't see how they can win this case against CDL. It is interesting how CDL is so sure about they under declaring their income

Most likely the case may be settled before going to court. However, if the case ever goes to court, CDL's lawyers will be flashing the evidences in court.
There are many possibilities. One of the possible silly things that this couple might do was that they had applied for another CDL's launch prior to this EC application. During the process, they had supplied the "true income" to CDL's agents?

Or.. since CDL is friend friend with other developers, they probably got the income statement from other developers.