CDL plans to redevelop the Fuji Xerox Towers as a mixed-use complex
CDL plans to redevelop the Fuji Xerox Towers as a mixed-use complex. After the COVID-19 pandemic dragged the group’s net profit in the first six months of the year, real estate giant City Developments Ltd (CDL) is stepping up plans to redevelop its older commercial buildings in Singapore’s central business district. CDL announced plans to redevelop the 38-story Fuji Xerox Tower office building in Tanjong Pagar and the seven-story Central Mall office and retail complex on Havelock Road to the Urban Redevelopment Authority. Under the government’s incentive programs, both properties may be granted higher plot ratios.
The SGX-listed developer announced the plans on Thursday, the same day it reported a 99 percent drop in net profit in the first six months of the year compared to the same period last year. From January to June, CDL, which manages S$23.8 billion ($17.4 billion) in global assets, earned only S$3 million in net profit as the group’s hotel business lost money, new home sales slowed, and revenue from investment properties fell due to the pandemic’s severe impact.
COVID-19 Erodes Organic Growth
“The COVID-19 pandemic has overshadowed core business fundamentals and eroded organic growth, leaving many businesses weakened as they grapple with macroeconomic uncertainties beyond their control,” said CDL executive chairman Kwek Leng Beng. “While our property development and investment property segments have remained relatively resilient, our hotel operations will face additional pressures in the coming quarters.”
The company’s Millennium & Copthorne unit was the hardest hit by the pandemic, as cities around the world closed their international borders to prevent COVID-19 from spreading further. The hospitality operator reported a S$208 million pre-tax loss, which included a S$34 million asset impairment charge. This is a 49 percent increase over the S$140 million pre-tax loss forecasted last month.
Despite the challenging economic environment, CDL has been actively investing in key global markets. In April, the company agreed to pay RMB 4.39 billion ($632.4 million) for a 51 percent stake in Chongqing-based Chinese developer Sincere Property Group. The company increased its stake in IREIT Global, a pan-European real estate investment trust, to 20.9 percent in the same month. CDL added a 10-story freehold property in Yokohama to its portfolio of rental apartments in Japan last month. In recent years, the company has expanded its presence in Japan, where it now owns residential properties in Osaka and Tokyo.
Rejuvenating Singapore CBD Assets
According to CDL CEO Sherman Kwek, the company will maintain its growth and transformation strategy as it navigates this unprecedented economic crisis. Following receipt of Singapore government approvals, the company will proceed with the redevelopment of Tanjong Pagar’s Fuji Xerox Tower and Magazine Road’s Central Mall. CDL intends to build a 51-story mixed-use commercial, residential, and serviced apartment tower with a gross floor area of 655,000 square feet on the Fuji Xerox Tower site at the southern end of the downtown core (60,851 square meters). The new structure will have 25% more GFA than the site’s existing office complex.
The company intends to demolish Central Mall and replace it with a mixed-use office, retail, hotel, and serviced apartment complex near Clarke Quay. Although the existing structure on the site at the heart of the historic Singapore River has a built up area of 240,000 square feet, CDL did not provide the expected GFA for the project. CDL previously collaborated with Singapore government-linked developer CapitaLand to redevelop the Liang Court Shopping complex along Clarke Quay into a mixed-use project consisting of two residential towers with 700 units, a 475-unit hotel, and a 192-unit serviced apartment component across the Singapore River from the Central Mall site.
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