| Operations and Market Review |
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On top of seizing opportunities in
Singapore, Keppel Land is focused
on key markets of China, Vietnam,
India and Indonesia.
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A YEAR OF EXCEPTIONAL GROWTH
Asia grew by an estimated 8.2% in
2010, according to the Economist
Intelligence Unit. A rebound in exports
and the timely fiscal stimulus were
important drivers in fuelling the recovery.
Resilient domestic demand, owing
to rising income levels and increased
urbanisation also contributed to
Asia's growth.
Stepping into 2011, the momentum
is likely to moderate and the key
macroeconomic challenge for Asia
will be dealing with rising inflationary
pressures. Monetary tightening tools
such as interest rate hikes, higher bank
reserve requirements and exchange
rate adjustments have been
progressively introduced.
Apart from inflation, higher property
prices and strong credit growth have
raised concerns of asset bubbles.
Additional measures such as property
taxes, lower mortgage quantum and
restrictions on the purchase of second
or more homes have been introduced
in major Asian cities to tame property
prices and curb speculative demand.
In the near term, residential sales
volume may be moderated but prices
should stabilise.
Moving forward, growth prospects
in Asia remain bright, despite the
expectation of inflation rising before
it stabilises. Asia will remain a growth
spot led by China and India.
Keppel Land believes that demand
for quality housing will be sustained
on the back of healthy economic and
demographic fundamentals.
EARNINGS REVIEW
Singapore
Revenue from Singapore operations
was down about 62% to $172.4 million
in 2010. Lower progressive revenue
was recognised from Singapore
residential projects following the
physical completion of The Sixth
Avenue Residences and The Suites
at Central in 2009.
Profit recognition from The Lakefront
Residences, which was launched
in November, will only commence
in the first quarter of 2011, some eight
weeks after buyers signed the sales
contracts and made payment of the
first instalment.
Excluding corporate restructuring
surplus, fair value gain on investment
properties/impairment and gain on
acquisition of additional interest in
K-REIT Asia, net profit from Singapore
declined by about 6% to $161.6 million.
The decline was mitigated by stronger
profit contribution from residential
projects held under associated
companies, mainly Reflections at
Keppel Bay and Marina Bay Suites, as
project sales improved and construction
progress continued.
The share of profit from K-REIT Asia was
also higher, bolstered by contribution
from newly acquired assets, namely
an additional 29% stake in Prudential
Tower, an office tower 77 King Street in
Sydney and a 50% stake in 275 George
Street in Brisbane, and the recovery of
the Singapore office market.
Profit contribution from Alpha Investment
Partners and K-REIT Asia Management
was also stronger with higher acquisition
and management fees earned.
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