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Unaudited Full Year Financial Statements Announcement And Dividend Announcement For The Financial Year Ended 31 December 2020

Financials Archive

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Profit & Loss

Consolidated Statement of Comprehensive Income

Balance Sheet

* $267.8 million (31 December 2019: $205.9 million) relates to the Group’s pre-sold development properties as at 31 December 2020.

Review of Performance

Operating Segments

n/m: not meaningful

Revenue and gross profit analysis

(ii) Revenue

The Group achieved revenue of $198.4 million in FY2020, 55% lower than $444.0 million in FY2019. In 2H2020, the Group achieved revenue of $80.4million, 74% lower than $304.1 million in 2H2019, This was mainly due to lower revenue from the Property Development and Hotel Ownership segments.

(a) Property Development

Revenue from the Property Development segment, which made up 84% of the Group’s turnover in FY2020, decreased to $165.8 million in FY2020 from $385.9 million in FY2019. For 2H2020, revenue from the Property Development segment, which made up 82% of the Group’s turnover, decreased to $66.5 million from $274.6 million in 2H2019. The decrease was largely due to absence of revenue recognition from The Hensley and The Navian upon settlement and TOP in 2019, as well as West End Glebe where most of the units’ settlement occurred in 2019. Delay in construction for development projects due to the closure of construction sites also contribute to a lower recognition of revenue in 2H2020 and FY2020.

(b) Hotel Ownership and Property Investment

The Hotel Ownership segment, which contributed 12% to the Group’s turnover in FY2020, decreased 50% to $25.2 million in 2020 from $50.4 million in 2019. In 2H2020, the Hotel Ownership segment contributed 13% to the Group’s turnover, decreased 61% to $10.2 million from $25.8 million in 2H2019. The Group’s hotel operations were affected by the COVID-19 outbreak as many countries imposed border control measures, impacting the tourism industry.

Revenue from the Property Investment segment constituted the balance of 4% of the Group’s turnover and contributed $7.4 million in 2020 as compared to $7.7 million in 2019. In 2H2020, revenue from the Property Investment segment constituted the balance of 5% of the Group’s turnover and contributed $3.7 million as compared to $3.8 million in 2H2019. Revenue from this segment comprises rental income from shop units in Roxy Square and NZI Centre.

(iii) Cost of sales and gross profit

In line with the decrease in revenue, cost of sales decreased to $165.1 million in FY2020 from $337.8 million in FY2019. In 2H2020, cost of sales decreased to $64.9 million from $235.7 million in 2H2019.

Gross profit from the Property Development segment contributed $17.4 million or 52% of the Group’s total gross profit in FY2020, while the remaining 48% or $15.9 million was contributed by the Hotel Ownership and Property Investment segments. Gross profit margin from the Property Development segment was 10% in FY2020, as compared to 19% in FY2019, mainly due to lower profit margins for some projects in Singapore as well as unexpected project cost escalation for Octavia Killara. The gross profit margin of the Hotel Ownership segment decreased by 9 percentage points to 39% in FY2020, mainly due to lower profit margin from the overseas hotels. Gross profit margin of the Property Investment segment decreased 5 percentage points to 81% in 2020 from 86% in FY2019 mainly due to rental rebates given to tenants.

In 2H2020, Gross profit from the Property Development segment contributed $9.3 million or 60% of the Group’s total gross profit in 2H2020, while the remaining 40% or $6.2 million was contributed by the Hotel Ownership and Property Investment segments. Gross profit margin from the Property Development segment was 14% in 2H2020, as compared to 19% in 2H2019. The lower profit margin in 2H2020 was mainly due to cost adjustment in 2020 for units sold in 2019 for West End Glebe and lower profit margin from Singapore development projects. The gross profit margin of the Hotel Ownership segment decreased by 18 percentage points to 30% in 2H2020, mainly due to lower profit margin from the overseas hotels. Gross profit margin of the Property Investment segment decreased 8 percentage points to 83% in 2H2020 from 91% in 2H2019 mainly due to higher cost in NZI Centre.

The Group’s overall gross profit margin in 2020 was 17%, lower than the 24% recorded in 2019, 2H2020 was 19%, lower than the 23% recorded in 2H2019, the lower gross profit margin mainly due to lower profit margin from Property Development and hotel ownership segments.


The Ministry of Trade and Industry (MTI) announced that the Singapore economy contracted by 5.4% for the whole of 2020. For 2021, MTI has maintained the GDP growth forecast at 4.0% to 6.0%.1

Reflecting the beginning of the expected economic effects of COVID-19, Australia’s GDP rose 3.3% in 3Q2020 on a seasonally-adjusted basis from the previous quarter 2, due to the easing of Covid-19 related restrictions. While Australia’s GDP is expected to recover at a faster pace than expected over the coming quarters, the Reserve Bank of Australia (“RBA”) anticipates that the pandemic will have long-lasting effects on the Australian economy, with GDP unlikely to return to pre-pandemic levels until end-2021.3 To ensure that Australia is well placed for the recovery, the RBA reaffirmed targets for the cash rate and the yield on 3-year Australian government bonds of 0.1%4.

In Japan, the economy grew by 5.3% quarter-on-quarter in 3Q20205. While the Bank of Japan has forecast real GDP growth of -5.6% for fiscal year 2020, it expects real GDP to grow by 3.9% in fiscal year 2021 as economic conditions improve6.

Impact of COVID-19

The COVID-19 pandemic has caused a severe disruption to global economic activity and the impact on economies across the world has been broad and significant, affecting different sectors to varying degrees. Even with a vaccine being distributed, the effects of the pandemic are expected to linger on for years. According to the International Air Transport Association, air traffic volumes are not expected to return to pre-Covid-19 levels until 2024.7 As a result of the challenging market conditions, the Group financial results will be adversely affected, and the extent of the impact will depend on the future trajectory of the pandemic and its recovery.

In response to the crisis, governments across the world have introduced various support measures to cushion the impact of COVID-19. The Group will tap onto the government support schemes, where available, to maximise the value of the support. The Group has also taken conservative approach with a primary focus on preserving cash by reduce operating expenses where applicable and deferring all non-essential capital expenditures. At the same time, the Group will keep a look out for opportunities and adopt a more stringent evaluation process.

Property Development


According to the Urban Redevelopment Authority (“URA”) the private residential property index increased by 2.1% in 4Q2020, compared to the 0.8% increase in 3Q2020. For the whole of 2020, prices of private residential properties increased by 2.2%. During the quarter, 1,852 uncompleted private residential units were launched for sale and 1,713 private residential units were sold. This compared to 2,093 units launched and 2,149 units sold in 1Q2020.

As at the end of 4Q2020, there were a total of 49,307 uncompleted private residential units (excluding executive condominiums) in the pipeline with planning approvals as compared to 50,369 in 3Q2020. Of these units, 24,296 remain unsold as at the end of 4Q2020, lower than 26,483 units in 3Q20208.

For 2021, property analysts expect the Urban Redevelopment Authority's (URA) benchmark index for overall private home price to post growth ranging from zero per cent to 4 per cent in 2021.

Construction of the Group’s residential projects are also expected to continue to be delayed due to the earlier Circuit Breaker period as well as the implementation of precautionary and safe distancing measures. Going forward, the Group will continue to prioritise the sale and delivery of the units in its current land bank.

Since the Phase 3 re-opening in Singapore, the Group’s showrooms have stepped up its engagement with buyers through physical and online marketing channels including virtual showrooms to showcase the apartment units.

In November 2020, the Group acquired a freehold residential site at Jalan Molek and Guillemard Road at the purchase price of S$93,000,000. This freehold residential site has an estimated total land area of 37,131 sq ft and is allowed for residential development with a Plot Ratio of 2.8.

In February 2021, the Group announced that it has entered into an agreement to acquire a 999-year leasehold residential site in Singapore, 10A and 10B Institution Hill, at the purchase price of S$33,600,000. The Group intends to amalgamate the site with another 999-year leasehold site at 11 Institution Hill after it exercises the Option To Purchase issued on 1 February 2021. The amalgamated site will have an estimated total land area of 14,300 sq ft with a total Gross Floor Area of 40,040 sq ft for residential development.


In Australia, COVID-19 continues to impact residential property transactions in some capital cities. The price index for residential properties for the weighted average of eight capital cities increased by 4.5% in the September quarter 2020 on a year-on-year basis with rises in all capital cities except Darwin. During the quarter, the key city of Sydney, where the Group has a presence in, registered a gain of 5.4% year-on-year.9

In Sydney, Australia, the Group’s residential development projects, Octavia Killara and West End Glebe, have been fully sold.

As at 31 December 2020, based on units sold from the following ongoing development projects, the Group has total attributable pre-sale revenue of $539.4 million, the profits of which will be recognised from 1 Jan 2021 to FY2023

Hotel Ownership

The Group’s hotel operations were affected by the COVID-19 outbreak as many countries imposed border control measures, impacting the tourism industry. While the re-opening process has slowly begun in some countries, the pandemic crisis continues to exert profound impact on the hospitality sector.

Singapore’s international visitor arrivals stood at 2.7 million for January to June 2020, a 71.4 per cent year-on-year decline10. Visitor arrivals dropped significantly to 14,700 in November 2020, a year-on-year decline of 99.9 per cent11.

The Group’s flagship Grand Mercure Singapore Roxy hotel joined a large number of hotels in providing their entire accommodation facilities any person(s) that need to be isolated from the general population in a “Government Quarantine Facility” as a matter of precaution. For hospitality, the Group will continue to focus on training, improving productivity, internal processes and operational efficiencies, to prepare for when the market recovers.

To curb the spread of COVID-19, Japan has travel bans in place for travellers from around 129 countries and regions, which resulted in a significant decrease in international visitor arrivals. For November 2020, visitor arrivals to Japan stood at 56,700, a decline of 97.7%12. As a result, Noku Osaka, one of the Group’s self-managed boutique hotels, has been closed for operations since November 2020. As part of its efforts to revive the domestic tourism industry, the government has unveiled a US$16 billion “Go To” campaign to subsidise domestic tourism. This has been temporary halted from December 28 to February 7 2021 to reduce infection risks.

Meanwhile, the Maldives reopened its tourist resorts on 15 July 2020 and received its first international flight in over three months. The Group’s upscale resort in Maldives, Noku Maldives, has received positive enquiries since the travel restriction was lifted.

The Group’s second resort asset in Thailand, Noku Phuket, is expected to operate in 2022.

Property Investment


The Group continues to communicate and support its tenants in tiding over this difficult period, providing assistance to eligible tenants in Singapore such as rental rebates and offsetting of cash security deposits, and also passing on the full amount of property tax rebates to tenants. The Group also continues to be vigilant following its implementation of precautionary and safe distancing measures.


The office sector is not expected to face an immediate structural shift in demand notwithstanding that office towers in core commercial markets are largely unoccupied due to remote working measures implemented in response to COVID19. Office assets in Sydney and Melbourne will continue to be highly sought after by investors given Australia’s strong prospects for economic recovery, long-term growth potential, and ‘safe haven’ characteristics13. To further enhance its recurring income stream, the Group, together with its joint venture partner, has recently announced the investment in a 40% interest in a commercial tower located at 350 Queen Street, Melbourne, Australia. The freehold property comprises a commercial tower with offices, retail offerings and community amenities, situated in the Central Business District of Melbourne, Australia.

Additionally, the Group’s re-development of the former Melbourne House at 360 Little Bourke in Melbourne, Australia into Park Hotel Melbourne, will be converted into a commercial development to tap on steady recurring income stream.

Together with its partner, the Group will continue to actively engage its tenants and extend support, where applicable, forging stronger relationships through this crisis.

New Zealand

There has been significant new supply added to total office stock across New Zealand in recent years. However, COVID19 has deferred the number of previously planned office projects, thereby limiting uncommitted supply. In the year ahead, this will assist in limiting the potential rise in vacancy rates which would have occurred had the pre-Covid-19 pipeline progressed as previously planned. Over the short-term, new development will predominantly be dependent upon significant tenant commitment being secured.14

Between our two key assets in New Zealand, 205 Queen Street, located in the core of Auckland’s CBD, enjoyed a high occupancy rate of 84% as of 31 December 2020. We will look for opportunities to raise occupancy to maximise rental yield. Additionally, our wholly-owned building, NZI Centre, situated in the western end of Auckland’s CBD, is fully leased to a well-known tenant – IAG New Zealand Limited – the largest insurer in New Zealand.


In Japan, high street vacancy stood at 3.3% in Q4 2020, an increase of 0.7 points from the previous quarter.

The number of units seeking new tenants increased during the period as multiple tenants elected to relinquish their leases as a result of poor performance triggered by pandemic. However, the central government’s declaration of a second state of emergency means that domestic spending, which had been recovering, is now anticipated to decline once more. With vacancies expected to rise and new opening demand anticipated to weaken, rents are forecast to fall by 7.5% over the next 12 months.

From Q1 2022, rents are projected to return to growth as the economy is expected to recover, limiting the net rent decrease over the next two years to 4.3%.15

During the year, the Group acquired a 49% stake in a 5-storey retail building, VIVEL Shibuya, located at Shibuya-Ku, Tokyo, Japan, in the central hub for youth culture in this city. This building is strategically located in close proximity to the Shibuya Station and adjacent to the famous Shibuya scramble crossing, which is proximity to immense amounts of foot traffic from both foreign tourists and domestic shoppers.

Overall, the Group’s investment properties maintained a high level of occupancy at 88% as at 31 December 2020


The economic outlook remains challenging for the year ahead and the prolonged COVID-19 pandemic is expected to adversely impact the Group’s operational performance.

Impairments of hotel assets and share of losses in overseas associated companies resulting from the impairments of properties have also adversely impacted the Group’s financial performance. The Group will remain financially prudent, defer uncommitted capital expenditure, implement cost savings as required, and maintain operation agility to conserve essential resources to prepare for post-pandemic recovery process. Despite all the challenges, the Group will continue to monitor the evolving pandemic situation and adjust and react proactively with appropriate countermeasures to minimise financial impact for the financial year ending 31 December 2021. Barring any unforeseen circumstances, the directors expect the Group to be profitable in the financial year ending 31 December 2021.

1 Ministry of Trade and Industry,Feb 15, 2021 – MTI Maintains 2021 GDP Growth Forecast at 4.0 to 6.0 Per Cent
2 Australian Bureau of Statistics, Dec 2, 2020 – Australian National Accounts: National Income, Expenditure and Product, Sep 2020
3 Reserve Bank of Australia, Nov, 2020 – Statement on Monetary Policy November 2020, Table 6.1: Output Growth and Inflation Baseline Forecasts
4 Reserve Bank of Australia, Dec 1, 2020 – Minutes of the Monetary Policy Meeting of the Reserve Bank Board
5 Ministry of Foreign Affairs of Japan, Dec 8, 2020 – Japanese Economy
6 Bank of Japan, January 2021 – Outlook for Economic Activity and Prices
7 International Air Transport Association, Nov 24 2020 - Deep Losses Continue Into 2021
8 URA, Jan 22, 2021 - Release of 4th Quarter 2020 real estate statistics
9 Australian Bureau of Statistics, December 8, 2020 - Residential Property Price Indexes: Eight Capital Cities
10 STB, February 1, 2021 - Singapore’s tourism sector emerges from 2020 with greater resilience and reinvention
11 Japan National Tourism Organization, Overseas Residents’ Visits to Japan, January 8 2021
13 Knight Frank, Asia-Pacific Real Estate Outlook 2021: Navigating The Post-Pandemic Recovery
14 Colliers International, New Zealand Office 2020 Review & 2021 Forecast
15 CBRE, Vacancy Rose in Ginza & Shinsaibashi; Demands Focused on Prime Locations

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