| LHN Group, which is dual-listed in Singapore and HK, has a more upbeat outlook considering that overall business sentiment in Singapore has been improving and the property market is on an upcycle. These will have a positive effect on rental prices and capital values, it said in its 1HFY18 (ended Mar 2018) results statement.  Kelvin Lim, executive chairman of LHN, with Jess Lim, deputy MD. NextInsight photo.In the industrial property segment, LHN sees occupancy and rents in Singapore to continue to be under pressure due to a relatively large supply of industrial space. The commercial space segment is positive, as LHN expects to see office occupancy and rents improving due to higher leasing volume and decreasing supply pipeline. To ride on the enbloc phenomenon, Golden Mile Tower Complex -- where LHN has a JV property -- has set up a sales committee to consider a possible enbloc sale. The JV owns and operates the car park at Golden Mile Tower Complex (see: LHN: Buys Golden Mile Tower carpark, has en-bloc potential ). |
|
(S$'000) |
1HFY18 |
1HFY17 |
Change (%) |
|
Revenue |
56,204 |
53,584 |
4.9 |
|
Gross profit |
15,449 |
13,367 |
15.6 |
|
Profit attributable to Owners |
2,368 |
4,707 |
(49.7) |
In anticipation of increased residential demand from young professionals displaced by enbloc properties and also to tap on the positive business outlook in Singapore, LHN has obtained approval from the Singapore Land Authority in March 2018 to convert approximately 33,000 square feet of its Raeburn Park property into its first co-living and co-working space in Singapore.
On 29 March 2018, the Group also signed a 15-year lease agreement with Nan An Shi Shi Jing Guang Xian Shi Ye You Xian company (南安市石井光贤石业 有限公司) to set up the co-living and co-working space business in Quanzhou, one of the three major cities in Fujian, as part of the Group’s business expansion plan in China.
The leased property has a total gross floor area of 7,373 square metre and the lease will officially commence upon getting approval from the relevant authority for its usage.
On 26 April 2018, LHN Residence Pte. Ltd., an indirect wholly owned subsidiary of the Company, and Spring CJW Development Pte. Ltd. (the “Developer”) have entered into a sale and purchase agreement to acquire an entire block of 108 units of condominium apartments within the Axis Residences.
There, LHN intends to operate its 85SOHO brand of serviced residences.
The Group has also entered into an exclusive property management agreement with the Developer to manage the common property and common facilities of the Axis Residences for ten years with an option to renew for another five years.
The property management agreement shall be effective from the date of completion of the construction of the building which is estimated to be around December 2018.
♦ Facilities Management Business: The Group continues to secure more external facilities management contracts providing security and cleaning services. However, due to rising wages, business costs for this business segment has increased. The Group will continue to look for more locations for its car park business in Singapore and Hong Kong, and also intends to expand the car park management business to Cambodia. ♦ Logistics Services Business: The Group remains positive on the outlook as its joint venture company, HLA Logistics Pte. Ltd., has commenced its depot management operations in Singapore in April 2018. The renovation of its second container depot in the vicinity of Bangkok, Thailand, is near completion and it is expected to commence operations in the second half of FY 2018. In addition, the Group will be starting its logistic trucking business in Malaysia in the second half of our financial year 2018. The Group has not yet utilised the proceeds from its listing in Hong Kong. |
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