Future Directions for the Company

2001 was also a year of change for the Keppel Group. During the year, Keppel Corporation divested its banking and financial services business, and privatised the offshore and marine, and infrastructure businesses.

Keppel Corporation will now focus on growing three key businesses – offshore and marine, infrastructure, and property – into regional and possibly global businesses.

The strategic goal for Keppel Land is to transform itself from a landlord and property owner to a focused developer of outstanding properties for sale and manager of property funds. Keppel Land as the property arm will complement the other two core businesses of the Keppel Group, which will be able to enjoy the counter-cyclical advantages of the property business vis-a-vis the offshore and marine sector without having to suffer the huge swings in values due to property cycles.

Going Asset-Light

Going forward, Keppel Land will adopt an asset-light approach in the real estate business. There will be less emphasis on property investment as it requires heavy capital and produces low returns.

Keppel Land will divest its investment assets through various means such as a listed property trust, asset securitisation and direct sale.

With an investment building portfolio worth about $2.1 billion in Singapore, the divestment will enable the Company to re-deploy resources into better-yielding development assets as well as grow its new property-fund business.

During the year, the Company divested non-core assets overseas and in Singapore. It divested a 5% stake in Australand Holdings, a property developer listed on the Australian Stock Exchange, a 70-suite hotel-cum-retail complex called Bayswater Village in Sydney, a serviced apartment called Nana Tai Mansion in Bangkok, and several shop units at The Arcade in Singapore. The total sales proceeds amounted to $70.5 million.