ST : UIC Building may become residential block

Feb 24, 2010

UIC Building may become residential block

UIC board still assessing options, says chief of UOL, whose full-year profits surge to $424m

By Harsha Jethnani

UNITED Industrial Corporation (UIC) has won in-principle approval from the Urban Redevelopment Authority to convert its UIC Building in Shenton Way into a mainly residential development.

But no firm decision has been made on the building's fate.

The UIC board is assessing all alternatives to ensure the best use for the property, according to UOL group chief executive Gwee Lian Kheng.

He disclosed this yesterday as the property group announced a near tripling in full-year profits to $424.2 million in the 12 months ended Dec 31.

The sharp jump was predominantly attributable to UIC having become a 32 per cent associated company of UOL.

Net profits included a negative goodwill sum of $281.1 million from the acquisition of shares in UIC.

Earnings from associated company Nassim Park Residences also contributed to the surge in profits.

UOL posted a record-breaking year in revenues, which rose 12 per cent from $899 million to just over the $1 billion mark.

'Our strategy of tapping the demand of mass- and mid-market housing segments was well timed,' said Mr Gwee.

'This has helped us reach a major milestone of becoming a billion-dollar company by turnover.'

Strong sales from the group's Double Bay Residences and Meadows@Peirce contributed to the revenue rise.

The group's property development arm represented 53 per cent of revenue.

Higher average rental rates brought about a 12 per cent rise in revenue from investment properties to $141.7 million.

Revenue from hotel operations declined 13 per cent to $294.5 million as revenue per available room fell amid a slowdown in tourism, the group's statement said.

Pan Pacific Hotels Group, the group's listed hotel subsidiary, saw revenue fall by 9 per cent due to weaker performance in the group's hotels.

Mr Gwee said the 'difficult period for the hotel industry may be over' and that efforts would be made to 'secure more hotel management contracts, thus increasing fee-based income'.

The developer remains focused on Singapore's resilient mass and mid-tier to high-end residential market.

A total of 1,138 residential units are in the pipeline this year. Developments at its Dakota Crescent and Toh Tuck Road sites are expected to be launched by the second quarter of this year. A total of 616 and 172 units respectively are estimated to be made available at these sites.

In the second half of the year, the group will launch a development in the Spottiswoode area, where it had purchased Spottiswoode Apartment and Oakswood Heights in 2007, releasing about 350 units.

Overseas, another 1,014 units are in the pipeline - 520 in a mixed development in Tianjin, China, and another 494 units in a development located in Kuala Lumpur.

Full-year earnings per share were 53.7 cents, up from 18.5 cents the year before.

Net asset value per share as of Dec 31 stood at $5.29, up from $4.26 previously. A final dividend of 10 cents per share has been proposed.

UOL shares closed 11 cents higher at $4 yesterday before the results were announced.

harshamj@sph.com.sg