SINGAPORE (May 7): Perennial Real Estate Holdings reversed into 1Q19 losses of $26.9 million, compared to earnings of $5,1 million a year ago.
The negative bottomline was mainly due to higher finance costs and expensing of startup and operating costs for Perennial International Health and Medical Hub (PIHMH) in Chengdu and The Capitol Kempinski Hotel Singapore.
Revenue for 1Q19 at $24.9 million was 66.3% higher than a year ago, mainly lifted by revenue from Capitol which was consolidated since May 2018, revenue from PIHMH and higher fee income from its management businesses.
1Q19 EBIT decreased 80.9% to $4.7 million as 1Q18 EBIT included a one-off gain recognised by one of the associates. Excluding this, EBIT would be higher by 43.6%, mainly attributable to higher contribution from management businesses.
In its outlook, Perennial says the focus for its Singapore assets would be to drive improvement in operating performance through active marketing of strata units in 111 Somerset and repositioning of Capitol Singapore.
At 111 Somerset, with the improving office market sentiment, over 10 office units in Somerset Tower were sold between $2,586 and $2,890 sf to date. The total year to date gross strata sales amounted to $28.3 million.
Under URA’s new masterplan, Perennial plans to increase AXA Tower’s gross floor area by 46.5% to 1.55 million sf to incorporate office, hotel and residential components.
In line with the group’s capital recycling strategy, Perennial recently divested its 50.64% stakes in entities that own the retail mall and four strata office units in Chinatown Point for $520 million.
In China, PIHMH registered an increase in committed occupancy to 92.8% as at end March. Anchor tenant Gleneagles Chengdu Hospital has started fitting-out works and is expected to start operations in 2H19.
As at end March, Perennial group had an NAV of 1.655 cents.
Shares in Perennial closed at 64 cents on Tuesday before the results announcement.
