Kwek Leng Beng’s City Developments Hotel Losses Offset Robust Home Sales is a Millionaire.
City development, under Kwek Leng Beng, the billionaire, said on Thursday that continuous Hotel Losses under pandemic restrictions compensated for robust homes sales in Singapore, Australia, and China. City Developments was the main reason for this event.
In the first half ended June 30, the developer listed in Singapore posted net losses in the amount of S$32.1 million ($23.7 million), compared to the profit of S$3.1 million a year earlier. The Group increased sales by 11% to S$1.2 billion, driven by an increase in sales of housing. In the event that government lock-ups contained the spread of coronavirus, revenue from their hotel and commercial properties decreased.
Higher tax expenses and funding costs also affected the results of City Development. The company also stated last week that ongoing financial disturbance is occurring in its cash-strapped Chinese subsidiary Sincere Property, which faces bankruptcy claims on one of its creditors in China.
City Developments reported net losses in 2012, which amounted to S$1.78 billion, the worst ever in its financial performance, as a result of its investment in Sincere Property last year. As of June 30 the Company reported a financial exposure of S$ 117 million to Sincere Property and that all interest payments from the Chinese unit were affected.
“We look forward to a stronger upturn at the end of 2021 and the beginning of 2022 and expect strong latent demand for domestic and regional transport, with more upturn when international travel is allowed,” said CEO Kwek. In the future, we look forward confidently to a steady economic recovery and a better path of growth in the short term given an open economy determination.”
His residential business is a hot spot for the group. In the first half in Singapore, the Singapore Group sold 971 dwellings of 1,7 billion S$, up from 356 dollars sold a year ago, worth 514.7 million. There are good sales for projects across China and Australia, he said.
City Developments said that in order to take advantage of the rising demand for housing in Singapore it plans to start four projects with nearly 2000 housing units.
CanningHill Piers, a 696-unit development at the Clark Quay across the Raffles Place financial district, will start in the fourth quarter in partnership with CapitaLand. A mixed residential, commercial, and hotel complex will be part of the renovation work on the former site of the Liang Court shopping complex along the Singapore River.
In 2022 City Developments said it is launching a residential component in Tanjong Pagar on the edge of the central business district, the Fuji Xerox Towers renovation project. It is also going to start next year in Western and Central Singapore two other residential projects.
Also Kwek, 80, is the president of the Hong Leong Group in Singapore, which his father founded in 1941. In Malaysia, Hong Leong also is run by his cousin Quek Leng Chan, also a billionaire. Kwek is ranked No. 8 in the 50 Singapore Richest list published today, with a net amount of 8.5 billion dollars. Since 2018, Sherman’s eldest son has been Group CEO of City Developments.