Overseas Realty records robust 3Q on apartment sales

Overseas Realty (Ceylon) PLC reported robust revenues and profits in the three months to September, as the sales of residential apartments at its final two phases of the company’s iconic Havelock City project continued strong, with the construction of its fourth and final phase coming to an end. 

The luxury real estate developer for both commercial and residential use reported revenues of Rs.1.97 billion in the July through September quarter, up nearly 90 percent from the same period last year, with the bulk of the revenues or Rs.1.3 billion coming from the sales of apartments, from Rs.374.4 million in the corresponding period in 2020, which translates into a 248 percent growth.    

“With the successful completion of the fourth and final phase and having obtained the COC from the UDA, Havelock City is currently handing over completed apartment units to its buyers,” the company said in a statement. 

The final two phases of the Havelock City residential project – phase 3 and phase 4 – consist of 304 and 340 luxury residential units, respectively. By the end of 2020, the company had sold 68 percent and 26 percent of the units at each of the two phases. 

The pace of growth in sales during this year reflects that the luxury apartment sector has continued its growth momentum, defying the pandemic-related challenges in the economy. 

In fact, barring a brief setback at the initial stage of the pandemic last year, the real estate sector and broader construction sector expanded with the two sectors being identified as essential and the stimulus received by way of lowest interest rates and the removal of value-added tax on apartment sales.

The company’s stronger apartment sales could also be a sign that the overall condominium market, which lost some steam in the June quarter, according to the Condominium Property Volume Index, may have bounced back in the subsequent quarter. 

Meanwhile, the company generated rental incomes of Rs.508.3 million from the leasing of office space at its World Trade Centre towers in the three months to September, which marked a decline of 12.1 percent from the same period last year. 

The company said it completed the refurbishment and upgrading of the common facilities at the two buildings in Colombo during the period.

The company also generated revenues from other property service and such revenues rose to Rs.165.2 million in the quarter, from Rs.86.9 million in the year earlier period. 

The company also said its commercial component of the Havelock City project, comprising of 50-storey Grade A office tower, Mireka Tower and an international standard shopping mall, with a range of retail, F&B and entertainment options, are substantially completed and is expected to open in mid-2022. 

The company has been pre-leasing space at the office tower and shopping mall. 

Overseas Realty reported earnings of 64 cents a share or Rs.789.8 million in the July-September quarter, compared to 49 cents a share or Rs.608.5 million in the same period last year, logging a growth of just under 30 percent. 

For the nine months ended in September, the company reported earnings of Rs.1.29 a share or Rs.1.6 billion, up 18 percent, from Rs.1.09 a share or Rs.1.35 billion in the same period last year. 

The sales for the nine-month period grew by 75 percent to Rs.4.93 billion, with the revenue from property sales at Rs.2.97 billion, up 277 percent over the same period last year.