City Developments’ 1QFY2024 business updates for the January to March quarter showed its net gearing ratio, factoring in fair value on its investment properties, rising to 63% as at March 31, compared to 61% as at Dec 31, 2023.
Its interest coverage ratio fell to 1.2x compared to 2.8x in FY2023 and 9.8x in FY2022. “Nevertheless, the Group has strong cash reserves of $2.4 billion. It maintains a robust liquidity position comprising cash and available undrawn committed bank facilities totalling $3.7 billion. Its debt expiry profile also remains healthy,” CDL says in its press release.
The statement added that the group maintained a substantial level of natural hedge for its overseas investments and “will continue its proactive and disciplined approach to capital management”.
“There are no material concerns over the Group’s ability to fulfil its near-term debt obligations,” CDL says.
On March 8 this year, CDL initiated a share buyback programme for its ordinary shares. As at April 23, CDL has acquired total of 10,442,800 shares, representing 1.15% of issued shares before the buyback, for a total consideration of $61.3 million. Despite the share buyback programme, CDL will be removed from the MSCI Global Standard Index on May 31.
In May 2024, after the end of 1Q2024, CDL completed the acquisition of the 268-room Hilton Paris Opéra hotel for EUR240 million ($350.2 million).
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On the capex front, CDL plans asset enhancement initiatives (AEIs) on four hotels. In London, it will spend GBP16.5 million ($28 million) to renovate the Millennium Hotel London Knightsbridge and rebrand it as M Social Knightsbridge in 1H2025.
M Social Phuket will undergo Phase 2 of an AEI. Altogether CDL will have spent the equivalent of $36.9 million on the Phuket property.
The Millennium Downtown New York will be renovated and rebranded as M Social Downtown New York (to be completed in 1H2025), with renovation costs estimated at US$43 million (($57.9 million). Elsewhere the M Social Hotel Sunnyvale in California (263 rooms) is under construction for a cost of US$115 million and will fully reopen in 2H2026.
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The Group plans to launch two new residential projects in 2H2024. The first is the 366-unit Union Square Residences, part of the Group’s larger redevelopment project named Union Square, located at the site of the former Central Mall (office), Central Mall (conservation shophouses) and Central Square. The second upcoming project is located at Champions Way in Woodlands, comprising 348 units. The site is within minutes' walk to the Woodlands South MRT station.
On the revenue front, CDL associate, Cityview Place Holdings which holds 203 units at The Residences at W Singapore Sentosa Cove, offered a special price for 58 selected units for a limited period. Altogether including past sales, 76 units have been sold.
In 1Q2024, the group and its joint venture associates sold 429 units with sales revenue of $736.8 million (1Q2023: 88 units with a total sales value of $213.2 million).
