Higher capitalisation rates for the valuation of real estate developer’s two London properties help it return to profitability
REAL estate development and investment company Ho Bee Land reported a net profit of S$8.8 million for the six months ended Jun 30, 2024, reversing a net loss of S$155.7 million in the same period a year ago.
Revenue for the half was up 48 per cent at S$230 million, from S$155.5 million in the previous corresponding period.
In a bourse filing on Monday (Aug 12), the group said that development property sales more than trebled to S$94.7 million, compared with S$29.9 million in H1 FY2023, driven by higher sales in Australia and Sentosa Cove in Singapore.
Fair value losses in its investment properties lessened to S$11.2 million from S$208.3 million a year ago. This was due to higher capitalisation rates adopted for the valuation of two London properties, while the valuation of its Singapore portfolio remained unchanged.
Cost of sales more than trebled to S$77.9 million from S$22.7 million in the prior year, as a result of higher sales. Income tax expense increased 27 per cent to S$25.5 million.
Earlier on Monday, the group announced that it would sell a 49 per cent stake in wholly owned subsidiary, HB Universal, at a consideration of S$134 million. Gain on disposal is estimated to be S$34.8 million.
HB Universal is a special purpose vehicle which holds Elementum, Ho Bee Land’s biomedical life-science development, at 1 North Buona Vista Link. The deal is slated to be completed by Aug 21, 2024.
Shares of the counter closed Monday up 2.2 per cent or S$0.04 at S$1.83, before the update.
