Aug
* Q2 net profit S$476 mln vs S$156.9 mln loss year ago
* Profit beats average analyst forecast of S$166 mln
* CapitaLand expects continued improvement in operations
* Property assets under management slip to S$49.8 bln (Adds details of results)
By Kevin Lim
SINGAPORE, Aug 4 (Reuters) - CapitaLand (CATL.SI), Southeast Asia's largest property developer, said its various businesses are set to improve due to strong economic growth in its main markets, after posting a fourth consecutive quarter of profits.
CapitaLand has benefitted from a run-up in home prices in China and Singapore, its two biggest markets, during the past few quarters. But the rally appears to be wavering as transaction volumes slow amid government measures to cool the market.
"Robust economic growth in Singapore, China and Vietnam ensure fundamentals in these markets remain strong, and this will generate real demand in the real estate sector," CapitaLand Chairman Richard Hu said in a statement.
CapitaLand, 39 percent held by Singapore state investor Temasek [TEM.UL], earned S$476 million ($352.8 million) in the three months ended June, rebounding from a S$156.9 million loss a year ago when the firm was hurt by writedowns and revaluation of property assets. This is its best net profit since the fourth quarter of 2009.
Its second-quarter earnings were well above the S$166 million average estimate of four analysts surveyed by Reuters.
Excluding the effects of revaluations, CapitaLand posted a net profit of S$272 million for the second quarter, which was more than double the S$124 million it earned in the same quarter of last year.
The Singapore firm said its low debt levels and large cash reserves of S$4.9 billion will allow it to continue investing in new projects and make strategic acquisitions.
OFFICE RENTS
Office rents in the region are, however, beginning to rise after falling more than 50 percent during the financial crisis. Colliers International, a real estate consultancy, estimates Singapore office rents rose 6.1 percent in the second quarter and predicts they may rise another 10 percent before end-2010.
CapitaLand CEO Liew Mun Leong said in the statement prices of high-end developments in Singapore could strengthen by another 10 percent this year, although he conceded prices of mass market condominiums will likely remain stable for the rest of 2010.
CapitaLand, which is also Asia's second-largest property fund manager after Morgan Stanley (MS.N), said assets under management stood at S$49.8 billion as of end-June, slightly down from S$50 billion at end-March.
CapitaLand shares have fallen 2.9 percent this year, underperforming a 3.6 percent rise in the stock index. (Reporting by Kevin Lim; Editing by Muralikumar Anantharaman)
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