Revenue is down 15% to S$752.4 million, from S$882.9 million over the same period

 

PROPERTY developer GuocoLand&rsquo s : F17 -0.66% net profit for the second half of its 2024 fiscal year ended Jun 30 fell 58 per cent to S$62.8 million, from S$148 million in the same period a year ago.

 

Revenue also declined to S$752.4 million, a 15 per cent drop from S$882.9 million over the same period, said GuocoLand in its financial statement released on Thursday (Aug 29).

 

Earnings per share for the six-month period stood at 4.83 Singapore cents, compared to 12.51 Singapore cents a year ago.

 

For the full year, net profit came in at S$129 million, 38 per cent lower than S$207 million in the previous FY.

 

Revenue, however, grew 18 per cent to S$1.8 billion from S$1.5 billion.

 

Earnings per share came in at 9.95 Singapore cents, down from 16.97 Singapore cents a year ago.

 

The company has declared a first and final dividend of six Singapore cents per share.

 

GuocoLand said that the revenue growth was due to its property investment and property development segments reporting double-digit increases.

 

Property investment revenue grew 35 per cent year on year to S$229 million, while property development achieved revenue of S$1.52 billion, a 16 per cent increase from the previous year.

 

These were driven by higher recurring rental revenue from the Guoco Midtown mixed-use development, and higher residential sales in Singapore.

 

Guoco Midtown achieved a 98 per cent take-up rate for its office spaces, while another mixed-use development, Guoco Tower, maintained its occupancy rate of 99 per cent.

 

Over at 20 Collyer Quay, an office building located by Marina Bay, also achieved an occupancy rate of 96 per cent.

 

GuocoLand&rsquo s retail assets in both mixed-use developments are fully leased, while the Lentor Modern retail mall, which is slated to open in 2026, was already 41 per cent leased as at Jun 30.

 

As for its property development business, luxury condominium Lentor Mansion, which was launched in March this year, saw about 77 per cent of its total units sold as at Jun 30.

 

In addition, freehold luxury condo Meyer Mansion, which was completed in February this year, has been fully sold.

 

Despite the higher revenue, net profit still declined due to increased financing costs, lower fair-value gains of investment properties, and the challenging market in China.

 

GuocoLand said that Singapore continues to be the strongest revenue contributor for the group, with the market making up 81 per cent of its group revenue.

The 99-year leasehold development with 941 units is slated for launch in 2025

 

REAL estate group GuocoLand has secured S$847.1 million in green financing to develop a residential site at Upper Thomson, which was awarded to its tie-up with Hong Leong Holdings in April this year.

 

The club facility was raised under its green finance framework, which enables it to deliver environmental and social benefits to support its sustainability initiatives.

 

UOB, OCBC and DBS were the arrangers for GuocoLand&rsquo s latest green facility.

 

This brings Guocoland&rsquo s total green financing secured to date to more than S$3.7 billion, said the group on Tuesday (Aug 20).

 

The group added that it plans to develop the 32,023.7 square metre Upper Thomson (Parcel B) site into a residential development with 941 units, spread across five 25-storey towers.

 

A part of the former Seletar Institute, which was initially established as Upper Thomson Secondary School, will also be conserved, said GuocoLand.

 

The 99-year leasehold development is slated for launch in 2025.

 

It is near a new cluster of private housing projects coming up in the Lentor Hills precinct, where six plots have been sold so far and five projects launched. The development is also close to the Central Catchment Nature Reserve and Springleaf MRT station.

 

It will be GuocoLand&rsquo s second project to achieve a Green Mark Platinum (Super Low Energy) with Maintainability Badge certification by the Building and Construction Authority.

 

Dora Chng, residential director of GuocoLand, said the group&rsquo s upcoming development at Upper Thomson is an extension of its placemaking strategy to uplift neighbourhoods.

 

The group announced last year that it obtained a S$498.6 million green club facility that would go into financing its residential site at Lentor Gardens. In June 2023, it also bagged a S$974 million green loan to refinance Guoco Tower, specifically the building&rsquo s commercial components.

 

Andrew Chew, group chief financial officer of GuocoLand, said: &ldquo We will continue to explore innovative capital management initiatives to support our development projects and sustainability aspirations.&rdquo

On Jun 10, Guocoland : F17 0% chairman and non-independent non-executive director Quek Leng Chan marginally increased his deemed interest, with a purchase on the open market by Associated Land Sendirian. He picked up 56,000 shares at an average price of S$1.50 a share.

 

He maintains a 71.85 per cent deemed interest in the leading real estate group, which is focused on its twin engines of growth in property investment and property development.

DBS Group Research has described Guocoland' s divestment of its stake in KL-listed EcoWorld International as a strategic move to signal a sharper portfolio and management focus.

 

On May 10, Guocoland announced it has sold its entire 27% stake in EWI for $61 million, which is a 22% premium over its carrying value of $50 million.

 

One of the known buyers is another Malaysia-listed company, Paramount Corporation, which has acquired a 21.54% stake on EWI.

 

DBS, in its May 13 note, observes that the transacted amount was just 1% of Guocoland' s market cap of around $1.8 billion.

 

However, the divestment highlights its statement of intent to sharpen its focus and portfolio of properties, divesting away non-core assets and redeploying for other higher investments with higher returns. 

 

DBS, which has kept its " buy" call on this counter, points out that Guocoland' s shares, which gained 3% year to date, has outperformed the broader index of developers FSTREH.

 

Trading at just half its book value and 0.3x P/RNAV, Guocoland offers an upside of 50% to DBS' s target price of $2.30 and thus offers " compelling" value.

 

Catalysts for the stock include strong sales for its residential project launches in Singapore, further divestments of non-core assets and last but not least, the potential re-structuring into a stapled security / REIT. 

The 648 million shares sold have a carrying value of S$50 million in GuocoLand&rsquo s books

A SUBSIDIARY of GuocoLand has sold off its entire stake in Eco World International for S$61 million, in line with plans to focus on its key markets, said the property developer on Friday (May 10). The transaction price was agreed upon on a willing-buyer, willing-seller basis. This was after taking into account that the 648 million shares sold, which make up the group&rsquo s entire shareholding interest of 27 per cent in Eco World, have a carrying value of S$50 million in GuocoLand&rsquo s : F17 +2.01% books.

 

This was based on Eco World&rsquo s share price of RM0.355 on May 9. The Malaysian property developer is listed on the Bursa Malaysia.

 

The sale by GLL EWI, GuocoLand&rsquo s subsidiary, was through direct business transactions via Bursa Malaysia Securities.

 

With the divestment, Eco World has ceased to be an associated company of GLL EWI and GuocoLand.

It finds that Grade A office buildings need to have a range of amenities, be in a vibrant location for greater appeal to occupiers seeking to build social capital

 

A GREATER differentiation will emerge among Grade A office buildings in Singapore as businesses seek to build social capital in a hybrid working environment, according to the group chief executive officer of GuocoLand : F17 -1.32%.

 

&ldquo Companies that want to attract their staff back to the office more often will need to be not just in a Grade A office building but one with many amenities, lifestyle offerings and in a vibrant location,&rdquo said Cheng Hsing Yao in an interview with The Business Times.

 

Many of the head honchos of GuocoLand&rsquo s office tenants have shared with the property group that they wished more of their staff would spend more time working from the office instead of at home.

 

Social capital engenders resilience &ndash in both the business and in its individuals. When there&rsquo s a challenge, we can face it together.

CHENG HSING YAO, GROUP CEO OF GUOCOLAND

&rdquo

&ldquo This is not because they have a traditional mindset of wanting to see their employees sit at the office and do the work. These organisations recognise that spending time in the office together fosters corporate-culture building. Mentorship exists in observing, listening. Those little conversations and interactions cannot be underestimated,&rdquo said Cheng.

 

&ldquo My own experience is that if you want to make complex decisions jointly where the answer is not so straightforward, this is better done face to face. When you&rsquo re in the same room physically, there&rsquo s more of a co-creation process,&rdquo he added.

 

To help companies build this social capital &ndash trust and rapport among their employees to facilitate effective and honest communication &ndash GuocoLand has been developing the kind of office product it thinks will entice its tenants&rsquo staff to voluntarily want to spend more time in the office.

 

&ldquo It is important for office buildings to have recreational amenities, a range of F& B options at various price points in the vicinity and MRT connectivity,&rdquo said Cheng in the interview held at the Network Hub of Guoco Midtown in Beach Road.

 

This is a purpose-built business and social club that offers additional on-demand office spaces and meeting facilities to the office tenants in an adjoining 30-storey office tower. On the rooftop at the seventh level of the Network Hub are a 40-metre lap pool and a private dining room recreational facilities extend to the same level of the office tower, where there is a jogging track, fitness corner and an events plaza.

 

All these amenities are for the exclusive use of office tenants in Guoco Midtown, a mixed-use project connected to the Bugis MRT interchange station.

 

Positive association with office

Beyond the hardware, GuocoLand organises activities to spur office workers at Guoco Tower &ndash a mixed-use project the group developed earlier in Tanjong Pagar &ndash and Guoco Midtown to look forward to coming to the office. There are regular &ldquo sweet treats&rdquo events where they receive gifts from the landlord.

 

&ldquo The whole office lobby gets very noisy as everybody comes down the atmosphere is very happy,&rdquo said Cheng.

 

Festive markets and fitness classes are also held at Guoco Tower. At Guoco Midtown, there are plans for self-improvement and wellness classes at the Network Hub.

 

&ldquo All these create a positive association with going back to the office,&rdquo said Cheng.

 

For high-performing companies, the biggest cost in their business is staff remuneration, not rental, said Cheng. &ldquo Spending a bit more on good-quality office space, if that can help elevate the productivity, creativity of their staff, will yield a lot more returns. The boss will say: &lsquo This space is part of the investment in my talent. My people are happier and they want to work from the office more often.&rsquo &rdquo

 

Greater differentiation within Grade A offices

In short, within the Grade A office segment, hybrid work will accentuate the distinction between buildings that offer occupiers the attractions to draw more of their staff to the office &ndash and those that don&rsquo t.

 

Guoco Midtown&rsquo s office tower was completed in January 2023, followed by the Network Hub in August 2023. The project has achieved 97 per cent take-up (including pre-committed leases) for its 709,000 square feet (sq ft) net lettable area of office space.

 

Some 30,000 sq ft of retail space in the project was completed in stages last year and earlier this year. The development also has a residential component: the 219-unit Midtown Bay, which is more than 60 per cent sold and is slated for completion in the second quarter of this year.

 

Guoco Midtown was developed by GuocoLand and its Hong Kong-listed parent, Guoco Group.

 

Also integrated as part of the development is a joint-venture project across the road in Tan Quee Lan Street this comprises the Midtown Modern condo and a 20,000 sq ft retail podium called Guoco Midtown II. The 558 units at Midtown Modern are almost fully sold. GuocoLand partnered Hong Leong Holdings and Hong Realty for this project, which is slated for completion later this year.

 

Cheng recalled that when GuocoLand clinched the Beach Road site in 2017, there was some scepticism in the market about the high land price of S$1,706 per square foot per plot ratio and viability of a large office development in the location.

 

&ldquo But we bid for the Beach Road site on the back of our experience at Guoco Tower&rdquo , the office, retail, residential and hotel project the group developed on a site acquired in 2010 above the Tanjong Pagar MRT station.

 

Appeal of eclectic location

&ldquo When we began leasing the offices at Guoco Tower around 2015, we came across a group of tenants with more open mindsets who liked the area&rsquo s mixed character including shophouses, hawker centres and a whole range of other amenities.&rdquo

 

Likewise, for the Beach Road site, GuocoLand liked its eclectic location near shophouses and arts schools, combined with the youthful high-energy vibe of the Bugis area. &ldquo We felt the site and its attributes would allow us to create a very strong office mixed development.&rdquo

 

A number of senior executives of the office tenants at Guoco Midtown have told Cheng that moving their office to the development is part of an overall strategy to transform mindsets, heralding a new beginning.

 

GuocoLand plans to bring on board its placemaking programmes into the public spaces and Network Hub of Guoco Midtown.

 

The project is already connected to Duo, Bugis Junction and the Bugis MRT interchange station via an underground pedestrian network. It will also be connected to South Beach and Suntec City via overhead bridges. &ldquo If there&rsquo s more pedestrian movement across all the major developments, it&rsquo ll be better for the district,&rdquo said Cheng. &ldquo Over time, we will see our Guoco Midtown projects transform into the social heart of the Bugis area.&rdquo

 

The group has extended its placemaking ambitions to the Singapore residential scene over the past three years, at a new private housing estate near Lentor MRT station. GuocoLand is involved with four of the six sites in the locale sold by the state, comprising three joint-venture projects and a solo development that will include ground-floor retail space.

 

Twin engines of growth

Guoco Midtown and Guoco Tower have been critical pieces in transforming the group&rsquo s business from one of primarily for-sale residential property developments to also include a substantial investment property portfolio to provide recurring income.

 

The group&rsquo s pool of investment properties has expanded from around S$428 million as at end-June 2010 to S$6.24 billion as at Dec 31, 2023.

 

The end-December 2023 figure includes the office and retail components of Guoco Tower and Guoco Midtown, as well as 20 Collyer Quay in Singapore and a 18-storey office tower and the retail basement retained for rental income at the Guoco Changfeng City development in Shanghai.

 

GuocoLand&rsquo s recurring revenue from investment properties expanded from S$18 million for the 2010 financial year ended Jun 30, 2010, to S$69.6 million for FY2017 with the completion of Guoco Tower&rsquo s office and retail components.

 

The figure has continued to grow. In FY2023, it reached S$169.6 million, increasing 35 per cent year on year due to higher rental income from Guoco Tower and the Changfeng City office tower, and initial contribution from Guoco Midtown&rsquo s office tower. For the first half of FY2024, revenue from investment properties grew 46 per cent to S$109.4 million.

 

Just as the group seeks to help its office tenants develop social capital within their organisations, Cheng stresses it is equally important for GuocoLand to do the same.

 

&ldquo Social capital engenders resilience &ndash in both the business and in its individuals. When there&rsquo s a challenge, we can face it together. Such an environment spawns innovation,&rdquo he said.

 

&ldquo We are big on ideas and envisioning the future or emerging trends that in turn inform us in the way we design, build and manage our properties. That&rsquo s how resilience is built as well. During challenging times or when shocks happen, a project with a stronger concept will fare better.&rdquo

 

Guocoland chairman Quek Leng Chan has been buying shares of the Singapore-listed developer, via an entity he controls, HL Management Co.

 

The Malaysian tycoon first bought 98,700 shares on March 4, and on March 14, he bought another 2,100 shares.

 

The most recent transaction, as disclosed by the company via SGX, was for 27,900 shares on March 15.

 

On all days, Quek paid $1.43 each for these shares.

 

He now holds a deemed stake of 850.36 million shares, equivalent to 71.86% of the company. 

 

On March 17, GuocoLand F17 0.69% announced that 400 units or 75% of the 533 units at Lentor Mansion, were sold over the two days from March 15-16, including nearly 100 units taken up at the VIP launch on Friday, March 15.

 

Jointly developed by GuocoLand and Hong Leong Holdings, Lentor Mansion has a mix of two- to five-bedroom units across three 16-storey towers and three eight-storey towers.

 

Prices of units sold ranged from $1.149 million for a 527 sq ft two-bedder to $3.512 million for a 1,507 sq ft five-bedder.

 

Besides property development, GuocoLand in recent years has built up a sizeable portfolio of investment properties, boosting its recurring income stream.

As at Dec 31, Guocoland' s net asset value was $3.83.

 

SOME 400 units, or 75 per cent, of GuocoLand&rsquo s latest high-end residential development Lentor Mansion were sold over its launch weekend on Mar 15 and 16, the developer announced on Sunday (Mar 17).

 

The development, comprising three 16-storey towers and three eight-storey towers, includes a mix of two-bedroom and five-bedroom units. It is jointly developed by GuocoLand and Hong Leong Holdings, and slated for completion in 2027.

 

Prices during the launch ranged from S$1.149 million for a 527 square foot (sq ft) two-bedroom unit, to S$3.512 million for a 1,507 sq ft five-bedder.

 

The most popular was the two-bedroom layout, with all 214 units sold, GuocoLand said. Some 84 per cent of the 199 three-bedroom units were sold over the two days. Of the four-bedroom units, 16 per cent were sold and for the five-bedroom units, 13 per cent.

 

Based on data from Huttons Data Analytics, 75 per cent of the units sold are priced below S$2 million &ndash which Huttons Asia chief executive officer Mark Yip said &ldquo is the sweet spot entry price for first time buyers and HDB upgraders&rdquo .

 

Lentor Mansion&rsquo s launch is the first under the Urban Redevelopment Authority&rsquo s new guidelines, where units sold are based on liveable space.

 

&ldquo While the overall efficiency of the whole development may have been trimmed, the internal layouts of units in Lentor Mansion are comparatively more efficient and functional,&rdquo noted Marcus Chu, CEO of ERA Singapore.

 

In terms of price per square foot (psf), units sold at Lentor Mansion ranged from S$2,104 psf to S$2,478 psf.

 

At 99 per cent, almost all buyers at Lentor Mansion were Singaporeans and permanent residents, mainly comprising owner-occupiers. Buyers included a balanced mix of singles and young families, said GuocoLand.

 

It added that buyers were attracted to its &ldquo distinctive mansion-living concept&rdquo , inspired by Singapore&rsquo s black-and-white bungalows.

 

&ldquo Lentor Mansion is the best-selling project in 2024 in terms of number of units sold,&rdquo said Yip. &ldquo It is the second best-selling project in the Lentor precinct after Lentor Modern which sold 84 per cent of 605 units on the first day.&rdquo

 

PropNex CEO Ismail Gafoor added that it has the best take-up rate for a new launch since J&rsquo den sold 88 per cent of its units during its launch in November 2023.

 

Yip said the strong sales showed that buyers appreciated the &ldquo strong placemaking emphasis&rdquo placed in the precinct, and its growing appeal as a &ldquo private residential enclave&rdquo .

 

He added that buyers &ldquo may have been holding back&rdquo until they were able to compare projects in Lentor.

 

Lentor Mansion, GuocoLand&rsquo s third condominium launch in the estate, is the fifth new home development to be launched within the Lentor Hills neighbourhood.

 

&ldquo The various developers at Lentor Hills estate have largely maintained competitive prices and as such, homebuyers can rest assured that they are purchasing at comparable price levels,&rdquo said Chu. &ldquo For owner-occupiers as well as investors, this is an important consideration as future resale prices in these projects are likely to be more resilient and less volatile.&rdquo

 

&ldquo Quantum play&rdquo likely contributed to Lentor Mansion&rsquo s sales performance, given buyers&rsquo price sensitivity, said Gafoor, noting: &ldquo The starting prices at Lentor Mansion are comparatively lower than that of other projects in the vicinity, and that has stirred more interest among buyers.&rdquo

When Singapore-listed property group GuocoLand F17 0.00% chose an understated design for Guoco Midtown, its $2.4 billion mixed-use development on Beach Road, even its appointed architect, Melbourne-based Denton Corker Marshall, was initially concerned about its simplicity.

 

Guoco Midtown&rsquo s design is devoid of the more dramatic flair of its neighbours: The curves of South Beach towers (completed in 2016) by Foster and Partners, the sculptural twin towers of Duo (2018) by Buro Ole Scheeren and the trapezoidal towers of The Gateway by IM Pei.

 

However, GuocoLand group CEO Cheng Hsing Yao was determined to keep the design simple and to focus on the proportions, materials, detailing and colours. &ldquo It&rsquo s an understated landmark,&rdquo he says. &ldquo The simplicity gives it a quiet elegance.&rdquo

 

According to Cheng, the finished project has turned out to be better than he had envisioned seven years ago when GuocoLand won the commercial site on Beach Road with a bid of $1.62 billion.

 

Phased completion

The mixed-use development is being completed in phases. The 30-storey office tower with 709,000 sq ft of Grade-A space obtained a Temporary Occupation Permit (TOP) at the end of January 2023. The occupancy rate was 80% at TOP but has since increased to 92%.

 

There are just pockets of office space left. Indicative rents for the remaining spaces are above $13 psf per month, based on the latest market report in January by office leasing specialists Corporate Locations.

 

The Network Hub, completed last November, has amenities exclusive to office tenants and the future residents of the neighbouring 219-unit Midtown Bay and the 558-unit Midtown Modern across the road. It has a members-only lounge, café and concierge service on the first floor. The second level has flexible meeting rooms, hot-desking areas and fully-fitted private office suites. The third to fifth levels have offices with double-volume ceilings. On the rooftop is a 40m lap pool and an exclusive private dining room for 18 persons, with space for up to 100 at the poolside.

 

One of the meeting rooms in the Network Hub / Photo: Samuel Isaac Chua

 

Porsche moves

Guoco Midtown&rsquo s 50,000 sq ft retail and lifestyle space on the first level opened in January and is 100% leased. The anchor tenant, Porsche Studio, occupies an 8,500 sq ft duplex unit with a prominent frontage along Beach Road and Rochor Road.

 

Porsche Studio houses the first Café Carrera, a collaboration with Baker & Cook, and a display area for Porsche&rsquo s new &ldquo Prototype&rdquo collection. It also has a co-working space, two state-of-the-art simulators and a customer service area. Porsche Singapore also intends to hold community events in the public square fronting Porsche Studio.

 

Porsche&rsquo s entry proved fortuitous for Guoco Midtown. The duplex unit was initially fitted out for restaurant use on both floors. &ldquo We thought it would be taken up by a hotpot or seafood restaurant,&rdquo says Cheng. &ldquo It&rsquo s a very prominent street front. We wanted it to be vibrant and to draw people.&rdquo

 

Blue-chip tenants

Most office tenants at Guoco Midtown have moved in and they are a diverse mix of multinational companies. They include Porsche Asia Pacific, German bank Commerzbank AG, German chemical company BASF, Swiss-based Dutch energy and commodities company Vitol Asia, and Liechtenstein-based private bank VP Bank.

 

Other tenants at Guoco Midtown include Ant Group, the fintech affiliate of Alibaba Group Chinese internet technology company NetEase Japanese brewing and distilling company Suntory (famous for its single malt whisky) Taiwanese Fubon Commercial Bank and Singapore-based shipping company Pacific International Lines.

British advertising agency Saatchi & Saatchi and French advertising agency Publicis are also tenants at Guoco Midtown.

 

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Tenant diversification

According to Cheng, GuocoLand&rsquo s approach to tenant leasing ensures diversification across industries and business sizes. &ldquo We prefer to have a wide range of sectors and many different tenants rather than one super anchor or to focus on a particular sector,&rdquo he says. &ldquo History has shown that either of those strategies &mdash single tenant or single sector focus &mdash poses concentration risk. It&rsquo s very similar to the investment principle of risk diversification.&rdquo

 

The property group had adopted a similar tenant diversification strategy at its flagship mixed-use development, Guoco Tower in Tanjong Pagar, and it worked well.

&ldquo During Covid, there were sectors that didn&rsquo t do well but also sectors that performed better,&rdquo he adds. &ldquo In a way, they were countercyclical. A high-quality, Grade-A office building also minimises the risk of rental default, even during extraordinary events like the Covid pandemic. Most blue-chip companies will honour their rental obligations. It&rsquo s part of their corporate integrity.&rdquo

 

Guoco Tower is a 38-storey Grade-A office tower with 890,000 sq ft and was completed in 2016. It is 98% leased. Sitting on top of Guoco Tower is the 181-unit Wallich Residence spanning the 39th to 64th floors. The mixed-use development includes a 140,000 sq ft, six-storey retail mall that is directly linked to the Tanjong Pagar MRT Station on the East-West Line.

 

Growing investment portfolio

Since 2010, when GuocoLand acquired the Tanjong Pagar site, the property group had already intended to grow its investment portfolio. &ldquo It&rsquo s not accidental,&rdquo according to Cheng. &ldquo In 2010, we already wanted to grow our investment portfolio to have a stable source of recurring rental income. It will, in turn, counter the lumpy cash flow and cyclical nature of the development business.&rdquo

 

GuocoLand&rsquo s investment properties were valued at $6.2 billion, making up over half of the group&rsquo s total assets of $12.01 billion as of FY2023 (ended June 30, 2023).

In its 1HFY2024 financial results, revenue contribution from GuocoLand&rsquo s property investment business grew 46% y-o-y to $109.4 million, mainly due to the progressive commencement of leases at Guoco Midtown and positive rental reversions at Guoco Tower.

 

Property development revenue in 1HFY2024 was $918 million, up 67% y-o-y, mainly contributed by higher progressive recognition of residential sales in Singapore: the 200-unit Meyer Mansion (fully sold, average price $2,655 psf) the 558-unit Midtown Modern (98% sold, average price $2,803 psf) and the 605-unit Lentor Modern (98% sold, average price $2,103 psf).

 

GuocoLand&rsquo s 1HFY2024 earnings of $66.2 million were 12% higher y-o-y, with revenue of $1.07 billion, up 61% y-o-y, mainly on the strength of the group&rsquo s Singapore business.

 

&lsquo Good concept&rsquo

Cheng believes in having a good concept for its mixed-use development. &ldquo We conceptualised Guoco Midtown between 2017 to 2018, before the Covid pandemic,&rdquo he says.

 

&ldquo But already in our concept were things like the Network Hub to support hybrid work and a lot of landscaped areas and recreational facilities to promote wellness for our office tenants and homeowners. There is 3.8ha of landscaped areas on land area of 3.2ha.&rdquo

 

GuocoLand also incorporated biodiversity and the planting of native species as part of its landscaping, continues Cheng. &ldquo This addresses people&rsquo s tendency for biophilia.&rdquo

 

He adds that a good concept will attract blue-chip firms willing to pay premium rents to attract and retain talent.

 

Flight to quality will continue to be the trend in 2024. &ldquo GuocoLand [is] well-positioned to capitalise on this trend by sustaining its high occupancy rates and positive rent reversions,&rdquo says a DBS Group research report on Jan 31.

 

Residential community

The next phase to be completed at Guoco Midtown is the 219-unit, 99-year leasehold Midtown Bay, targeted for completion sometime in 2Q2024. The 33-storey Midtown Bay has a mix of one- to three-bedroom units, including duplexes with sizes ranging from 409 to 1,324 sq ft. Since its launch in October 2019, about 60% of the units have been taken up at an average price of $3,068 psf. Most of the recent buyers are said to be owner-occupiers.

 

&ldquo The concept of Midtown Bay was to introduce a residential community within Guoco Midtown,&rdquo says Cheng. &ldquo It appeals to those who want to be connected and be part of a vibrant business community.&rdquo Hence, Midtown Bay shares the same drop-off area as Guoco Midtown and is near the Network Hub.

 

Meanwhile, the 558-unit, 99-year leasehold Midtown Modern is targeted for completion sometime in 2H2024. Ipli Architects designed the project in collaboration with ADDP Architects. When completed, the project will directly link to the Bugis MRT Interchange Station (an interchange for the Downtown and East-West Lines) with an underpass to Guoco Midtown across the road.

 

Midtown Modern is developed on a 99-year leasehold residential site on Tan Quee Lan Street which GuocoLand, together with subsidiaries of Hong Leong Holdings, Intrepid Investments and Hong Realty, purchased in September 2019 for $800.19 million.

 

Community spaces, connectivity

Given that Midtown Modern will be linked to Guoco Midtown, Cheng considers the former as Guoco Midtown II. Once Midtown Modern is completed and residents have moved in, GuocoLand intends to launch activities to foster a vibrant community in the mixed-use development. The developer even has a placemaking and place management team.

 

There are three public squares within Guoco Midtown: Midtown Square (in front of Porsche Studio), Midtown Market (in front of the conservation building, Midtown House) and Midtown Common (in front of the Bugis MRT Station access). &ldquo We want to create spaces for people to enjoy,&rdquo says Cheng. &ldquo That&rsquo s why we have these public spaces and focus on wellness and recreational facilities.&rdquo

 

The developer estimates that the development will eventually have about 10,000 people passing through daily, including those working at Guoco Midtown and residents at Midtown Bay and Midtown Modern.

 

He also believes in connectivity: a covered overhead bridge will link Guoco Midtown to Suntec City, with another bridge linking it to the upcoming Shaw Tower. Guoco Midtown will also be linked underground to the Bugis MRT Station and Duo.

 

&ldquo Our development philosophy is to connect our project to our neighbours and welcome the movement of people between the different developments,&rdquo says Cheng. &ldquo When we uplift the neighbourhood, we will also benefit.&rdquo