Wing Tai chairman: Outlook for Singapore residential market still subdued despite pick-up in sales

SINGAPORE (EDGEPROP) - While the latest real estate statistics show a higher turnover of new residential units compared to the same period a year ago, Wing Tai Holdings chairman Cheng Wai Keung is not upbeat. Speaking at the company’s FY2019 corporate result briefing on Aug 27, he states that the pick-up in residential sales is largely due to the number of new projects launched this year rather than an indication of improving market sentiment.
“My outlook of the property market in Singapore is still quite subdued, and, in particular, we cannot deny that there is a lot of [incoming] supply in the marketplace that will dampen over-optimistic sentiments on the property market,” he says.
In Singapore, Wing Tai’s upcoming project on Middle Road will likely feature smaller units. “We have the approval to have more than 500 units [in the development],” says Cheng. When the site was launched for sale under the 2H2018 Government Land Sales programme, the guidelines indicated that the site could yield about 375 residential units.
Most buyers in the market today are generally end-users, rather than a mix of investors and homeowners. “We believe that a project targeted at [the homeowner] segment will still have market opportunities,” says Cheng, although he added that “the overall residential market is still affected by a lot of incoming supply”.
For FY2019 ending June 20, 2019, the group recorded a total revenue of $322.6 million, representing a 10% decrease from the $360.4 million revenue recorded in the previous year. The company says this is mainly due to lower contributions from development properties.
From left: Ng Kim Huat, group chief financial officer; Edmund Cheng, deputy chairman; Cheng Wai Keung, chairman; Tan Hwee Bin, executive director (Picture: EdgeProp Singapore)
Development properties brought in revenue of $136.2 million in FY2019, and is largely attributable to additional units sold in Le Nouvel Ardmore, Le Nouvel KLCC, and BM Mahkota in Penang, and the sale of land in KL, says Ng Kim Huat, Wing Tai CFO.
On top of looking for investment opportunities in Singapore, Wing Tai will focus on opportunities in Australia and Japan. In April this year, Wing Tai acquired a 134-room business hotel in Tokyo. “As the interest rate remains very low, we have to put some...