CapitaLand's net rises 11-fold after IPO of a unit

Singapore property developer CapitaLand Ltd. Thursday reported a more than 11-fold rise in its fourth-quarter net profit, mostly due to one-off gains from the listing of its mall unit, and flagged plans to increase its presence in Vietnam and China.

The developer recorded a net profit of 885.7 million Singapore dollars (US$627.1 million) for the three months ended Dec. 31, up from S$78 million a year earlier. Revenue rose 18.4% to S$833.0 million from S$703.7 million.

The net profit figure was higher than the average S$641.4 million estimate of seven analysts surveyed by Dow Jones Newswires.

CapitaLand in November raised S$2.8 billion through the initial public offering of its mall unit, CapitaMalls Asia Ltd. Excluding the S$899.8 million net gains from the CapitaMalls Asia listing, revaluations and impairments, net profit was S$279.3 million, compared with S$167.7 million a year earlier.

"We unlocked value for our shareholders with the listing of CapitaMalls Asia and divested properties in the industrial sector in Singapore for gains," CapitaLand Chief Executive Liew Mun Leong said in a statement.

Southeast Asia's largest property developer by capitalization has aggressively been building up its commercial and residential portfolios in markets outside its Singapore base as it seeks to expand in markets like China and Vietnam. But analysts have sounded a note of caution about the impact of Beijing's moves to tighten monetary policy on the developer's projects in China.

Vietnam accounts for about 1%-to-2% of the group's assets, though the company hopes to increase this to about 10%.

The group sees China as one of its core markets and aims to eventually have China account for 45% of its total assets, from 36% currently. CapitaLand earlier this year announced a US$2.2 billion acquisition of Orient Overseas Developments Ltd., the property arm of Chinese shipping company Orient Overseas Ltd.

CapitaLand expects it may take five to seven years to realize the value on these assets, and Mr. Liew said he is confident of the long-term fundamental factors underpinning the Chinese property market.

He said that while there is a degree of speculative demand in cities like Beijing, Shanghai and Guangzhou, the Chinese property market "should not be labeled as a bubble" just yet.

"There will be inflation, but to a level where if it exceeds affordability, then the bank will stop lending as they are controlled by that," he said.

Net profit for the full year was S$1.05 billion, down 16% from S$1.26 billion a year earlier.