DBS Reports Another Record Breaking Quarter
DBS group turned in another stellar quarter in its 1Q12 earnings report card on 27 April 2012. The Pan-Asian bank group said in its media communiqué that its 1Q12 earnings rose to a record $933 million, an increase of 16 percent over 1Q11. Total income crossed the $2 billion mark for the first time in the bank’s history as it recorded sustained growth in loan volumes, improved net interest margins, broad-based fee income growth and higher customer inflows for its treasury products. The banking group’s expenses remained flattish as increases in staff costs were offset by lower technology and other costs. DBS’s asset quality remained strong throughout as non-performing assets remained unchanged from 4Q11 at $2.91 billion, with its non-performing loan rate holding at 1.3 percent. DBS continues to be a well-capitalised bank with core Tier 1 ratio at 12.7 percent and total capital adequacy ratio at 16.4 percent, both well above regulatory requirements.
Significance: DBS continues on its road to extend its solid performance for the past eight quarters. The banking group is already looking to its next growth phase with the potential acquisition of Indonesian bank, PT Bank Danamon.
CDL Hospitality Trusts’ 1Q12 Gross Revenue Jumps 19%; Distribution Per Security Rises 16.8%
CDL Hospitality Trusts (CDLHT) has posted distribution per stapled security of 2.78 cents for the first quarter ended 31 March 2012, up 16.8 percent from the same year-ago period. The payout is after retaining 10 percent of income available for distribution as working capital to fund capital expenditure on asset enhancement initiatives. Before deducting income retained for working capital, the 1Q12 distribution per stapled security is 3.09 cents, up 17 percent year on year. Gross revenue rose 19 percent year on year to $38.4 million on the back of organic growth across the portfolio and a $2.7 million revenue boost from Studio M Hotel, which was absent in 1Q11 as its acquisition was completed in May last year. Notably, CDLHT’s 1Q12 combined weighted average stats for its Singapore hotels excluding Studio M, showed that their revenue per available room (RevPAR) and average occupancy rate were also CDLHT’s best-ever 1Q performance, fuelled by the general increase in visitor arrivals and bolstered by the Singapore Airshow in February 2012.
Significance: CDLHT is expected to ride on the strong growth trajectory in Singapore’s tourism sector in 2012 with the range of upcoming new tourist attractions. Furthermore, its low gearing of 25.6% positions CDLHT well to capitalise on opportunities to enhance and expans its portfolio.
Roxy-Pacific Acquires Freehold Residential Site
Roxy-Pacific Holdings (Roxy) has inked a deal to buy the freehold Jade Towers site at Lew Lian Vale off Upper Serangoon Road through a collective sale for $106.3 million. Based on the sale price, each owner can potentially receive gross sales proceeds of about $1.5 million or $1,016 per square foot on strata area, reflecting a 35 to 45 percent premium over the $700 to $750 per square foot which the apartments could fetch if sold on an individual basis in the secondary market, according to Savills Singapore, which brokered Jade Towers’ sale through a private treaty deal. The price for the 92,412 square foot site works out to about $807 per square foot of potential gross floor area assuming a new development is built up to the existing project’s gross floor area (GFA) of 131,702 square feet. This works out to a gross plot ratio of about 1.425, exceeding the 1.4 indicated for the site under Master Plan 2008. Meanwhile, the collective sale is subject to Strata Titles Board approval.
Significance: Roxy’s executive chairman noted that it could redevelop the site into a new project with as many as 171 units but it has yet to finalise the mix of units. Savills estimates the breakeven cost for a new project at about $1,200 to $1,250 per square foot.
