CDL's unsold inventory hits 449 units worth $4.4b in 2018

The Jovell, launched in September 2018, sold only 14% of its 428 units as of 17 February.

City Developments (CDL) reportedly has the largest share of unsold inventory in the market at 449 unsold units amidst a slowdown in residential sales momentum which fell 5% YoY to 1,113 units in 2018, according to report by DBS Equity Research.

The report highlighted how the unsold inventory could be worth up to $4.4b based on estimates.

Also read: CityDev's massive unsold landbank is key target for cooling measures

The firm’s FY18 sales volume was largely led by New Futura with 93% sold as of 17 February with an average selling price (ASP) of $3,500 psf, the report noted. It was followed by The Tapestry with 67% sold at ASP of $1,350 psf, Whistler Grand with 36% at ASP of $1,380 psf and the Jovell with 14% sold at ASP of $1,300 psf.

“In addition, The South Beach Residences sold 53 units (28%) including the 6,728 sqft super penthouse sold for $26m. We believe this is a commendable performance, although the project was launched after new cooling measures were implemented,” the analysts noted.

That being said, CDL’s strong-performing residential segment offset the massive decline in its hospitality business, climbing 23.76% to $2.05b in FY18, whilst profit before tax (PBT) leaped 43.44% YoY to $623.35m. As a result, the Group’s FY18 profits edged up 6.7% YoY to $557.33m from $522.18m in 2017, its financial statement highlighted.

Also read: CDL's profits edged up 6.7% to $557.33m in 2018

Analysts further added that CDL’s upcoming launches such as the 154-unit freehold Boulevard 88 along Orchard Boulevard, the 592-unit Amber Park development and 188-unit Haus on Handy in District 9 sometime in H1 2019 could be weighed on by July’s cooling measures and the relatively slow take-up in the residential market.

On the other hand, a separate report by Jefferies noted that CDL’s launch pipeline includes two freehold projects in prime districts and an executive condominium which could expect better up take.

“Management is realistic about achievable margin of 8-10% which we think bodes well for turnover,” Jefferies’ analyst Krishna Guha said. 

Guha however warned that further headwinds in UK from Brexit, a sharp increase in mortgage rates and unemployment rates could lead to a decline in residential prices which could affect CDL.