High land cost and reduced take-up rate of possessions in Singapore have instantaneous Frasers Property Limited to take a more careful approach from the Singapore residential market while the company actively evaluates for chances on the market.
See the Sengkang Grand Residences condo Sengkang Central Buangkok location.
“Singapore remains our home-ground, but we all have to be resilient and not simply invest for the sake of investing,” said Frasers Property’s staff chief executive officer Panote Sirivadhanabhakdi at the team’s earnings briefing.
The team has been cautious in acquiring residential websites given that land costs remain high while the take-up rate has been slow.
“But now we are keeping up with the market and the team has been actively reviewing chances,” he added.
In FY2019, Frasers took a 93.95 million write-down into the net realisable value of properties held for sale, reported The Business Times. Of this, Singapore made up $39 million, probably because of its Rivière growth at Jiak Kim Street.
The provisions, that are non-cash in nature,”can allow for more marketing initiatives and/or much better optionality in trading via Frasers’ residential stocks”, said the team.
Its 455-unit Rivière endeavor moved 46 of those 60 units released for sale as at end-October, while Seaside Residences has offered 768 of its 841 units.
“Residential markets across Singapore, Australia, the UK — although we are cautiously optimistic — are facing headwinds of various types,” explained Loo Choo Leong, team chief financial officer at Frasers Property.
To be able to construct a more resilient residential development portfolio, we have taken the conservative approach of taking additional provisions to protect our residential companies going forward.”
Loo considers that lowering prices isn’t the appropriate path for your own group.
It’s a cyclical company, it’s a long-term small business. We’ll have to look at how we construct enough gunpowder so as to ensure we’ll trade through relatively well, given the uncertainties that people view,” he said.
Frasers saw its net profit for FY2019 fall 25.3percent to $560.3 million, thanks to reduced contributions from development jobs and reduced fair value gains. But this was offset partly by recurring income resources.
For the year ended 30 September, earnings also decreased 12.2percent to $3.8 billion.
For this, a final dividend of 3.6 Singapore pennies was suggested down from 6.2 pennies for FY2018.