$CityDev (C09.SG)$ Outlook and Prospects Despite ongoing mac...

Despite ongoing macroeconomic challenges like inflation, interest rate sensitivity, geopolitical uncertainties and existing property cooling measures in Singapore, the Group remains cautiously optimistic. Early signs of interest rate moderation are boosting buying sentiment and transaction activities, signalling a potential turning point for the property markets, as well as reducing the Group’s financial burden.

Property Development: The Group has observed a notable uptick in residential sales in Singapore since Q3 2024, driven by a more favourable interest rate environment and pent-up demand, particularly for highly sought-after locations. While homebuyers remain selective, the consistent demand bodes well for the Group’s pipeline of residential projects in strategic locations. Since the start of November, new home sales have registered exceptional performance, with around 2,000 units sold (excluding Executive Condominiums) across five launches, including Union Square Residences. The robust sales performance in November surpassed the 1,889 units (excluding Executive Condominiums) sold in 1H 2024. The strong take-up rates generated the highest monthly new home sales since March 2013, signalling improved market sentiment. This positive trend is also boosting interest in existing inventory.
In November alone, over 50 units of Tembusu Grand were sold, bringing the project to 91% sold to date.

Investment Properties: The Group’s office and retail portfolio in Singapore, the UK and Thailand remain resilient, supported by strong occupancy rates and proactive asset management. The expected completion of City Square Mall's AEI in 2025, supported by strong pre-commitment rates, will aid in bolstering the Group’s portfolio stability.

Hotel Operations: The Group expects y-o-y growth across its hotel portfolio, especially in key markets like Singapore, London and New York. The recent acquisition of the Hilton Paris Opera hotel is expected to strengthen the segment's overall performance. Additionally, China’s recent fiscal stimulus packages aimed at economic revival may boost discretionary spending, positively impacting travel demand from Chinese travellers – an important feeder market for many of the Group’s hotels. On 30 October 2024, the UK announced a 6.7% hike in the national living wage, effective April 2025, with higher rates for younger workers. While this will increase operating costs in the UK, the Group will continue to enhance its efficiencies to manage these costs.

Capital Recycling: Representing a key pillar in its overall strategy, the Group continues to advance its capital recycling initiatives, with several divestments in the pipeline. The divestments range across different asset classes and geographies, and with interest rates expected to moderate further, the Group anticipates increased market activity and optimism.

With its core operations performing well and key initiatives progressing steadily, the Group maintains a positive outlook.