Roxy-Pacific Holdings achieved net profit of S$49.8 million in 2016, a 41% fall compared to 2015 when a large commercial project accounted for a significant profit.
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Roxy-Pacific executive chairman & CEO Teo Hong Lim speaking with some attendees after the FY16 results briefing.
Photo by Leong Chan Teik Two key things about the Singapore market for Roxy-Pacific:
1. Roxy-Pacific has about S$173 million of pre-sales revenue from its Singapore property development projects that will be recognised from 1Q17.
2. It has built up its landbank to four sites, which potentially can house 195 residential units. The attributable land cost is $121 million. Notably, these are freehold sites.
CFO and executive director Koh Seng Geok. Photo by Leong Chan Teik “Product differentiation is important, and freehold tenure is a natural differentiating factor," said Roxy-Pacific chairman Teo Hong Lim at a FY16 results briefing this week.
Straits Mansions, a freehold 25-unit development in the eastern sector of Singapore, was recently sold out within six months by Roxy-Pacific for a total value of $48.1 million.
In Australia, Roxy-Pacific has three development projects. The Sydney market is strong, which is why two projects were 91% sold within 6 months, said Mr Teo, adding that they are expected to achieve TOP in 2018.
In Brisbane, one project is 61% sold but the market is weak. Mr Teo would like the project to achieve more sales before construction is to start.
59 Goulburn St: Bought in 2014 for A$90.2 million by Roxy-Pacific as an investment property. Roxy has now put it on the market. Can it fetch A$150 million?
Photo: www.commercialrealestate.com.au A fourth project will soon be launched in Sydney, and it's big: A total of 231 homes are planned at the site in Cowper Street and Elger Street.
In Kuala Lumpur, Roxy-Pacific's development project (Wisma Infinitum) is 67% sold, which is a good result, and sales for a second tower will be launched soon.
All told, overseas pre-sales amounted to S$196 million as at end-2016. Thus the total Singapore and overseas revenue to be recognised from 1Q17 is $369.3 million (ie $196 + $173.3 million).
 Executive director and MD Chris Teo. Photo by Leong Chan Teik AirBnb largely caters to leisure travellers who are likely to be young while hotels such as Roxy-Pacific's Grand Mercure Roxy in Singapore serves mainly corporate clients, noted Chris Teo, an executive director of Roxy-Pacific. About 70% of Grand Mercure Roxy's guests are corporate clients, including airline crew, he added when asked about the impact of AirBnb on his hotel business. "Their needs are different from leisure travellers. They are not going to look for an apartment in some unfamiliar neighbourhood." Mr Teo said the supply of hotel rooms in Singapore is still strong and has affected room rates and occupancy rates in the industry. Grand Mercure Roxy Hotel (sited opposite Parkway Parade) experienced a 8% dip in revenue per available room (RevPar) in 2016 to $138.5. The average occupancy rate and average room rate were 88.5% and S$156.6, respectively. 2016 saw the first full-year contribution to Roxy-Pacific from Noku Kyoto hotel in Japan, which had an average occupancy rate of 52%, average room rate of S$310.5 and RevPar of S$161.6. Roxy-Pacific has two other hotel properties -- in Phuket and Maldives -- which are under development and renovation, respectively. They will commence operations in 2019 and 4Q2017, respectively. |
