Singapore’s CDL posts 18% jump in 2Q profits

368 Thomson, a recently launched project from City Developments Ltd.

Singapore’s City Developments Ltd reported an 18 per cent profit increase during the second quarter, spurred by high demand for homes and office space due to a record-high economic growth.

According to its disclosure report, the company’s second quarter net income jumped S$164.6 million (US$121.58 million), or 17.2 cents per share, from S$140 million, or 14.7 cents last year. Meanwhile, its revenue increased about 20 per cent to S$941.7 million during the same period.

In a statement, company Chairman Kwek Leng Beng said that “Singapore’s strong economic growth in 2010 has given the property industry several advantages.” However, the official has warned that “strong growths should be measured carefully since there are still several risks in the world economy.” The property development business, which was the biggest contributor to the company’s overall sales, has increased 29 per cent to S$444.19 million. Its hotel operations and rental properties have also reported an increase in revenue.

Meanwhile, the City Developments shares fell 2.2 per cent to S$11.66 on Thursday, a decline for seven consecutive days which is the longest losing streak in three months. During the same period, the benchmark for Straits Times Index has increased 0.8 per cent.

The land developer recently announced its plan to sell homes from its two housing projects in Singapore to meet the “healthy demand for properties”. In a statement, the Singapore company also announced its plan to expand in China by investing nearly S$300 million to buy new properties and land amid easing prices and sales in the country.

According to a report released by China Information News, property prices in 70 major cities in the country increased 10.3 per cent during July from the previous year, the slowest pace in six months.

Meanwhile, Singapore’s economy grew 24 per cent in the second quarter due to the surge of tourist arrivals and influx of foreign businesses. Previously, the government has signed the Singapore EntrePass law that encourages foreign investors and professionals to setup their business in the country.