SINGAPORE: City Developments Ltd, Singapore’s second-largest developer, said CEO Grant Kelley has resigned and would be replaced by the son of billionaire chairman Kwek Leng Beng.
Sherman Kwek, 41, appointed deputy CEO in April 2016, will become CEO from January, according to a filing with the Singapore stock exchange.
Kelley, 52, will leave at year end after 3½ years in the role to become CEO and managing director of Melbourne-based Vicinity Centres.
The exit of Kelley, who had rolled out City Developments’ diversification strategy from 2014, came as quarterly profit fell and the company raised concerns about surging land prices from aggressive bidding in government tenders.
At the same time, chairman Kwek said the “heartbeat” of Singapore’s residential property market appeared to be getting stronger, with signs of stabilisation.
City Developments’ second-quarter profit dropped 18% to S$109.9mil (US$81mil) as sales decreased 22%. The company’s shares fell as much 2.3%, the biggest decline since May.
The result was “below our expectations,” analyst Vikrant Pandey at UOB Kay Hian Pte said in a note to clients.
A series of government measures to cool the property market since 2009 have caused Singapore’s home prices to fall for 15 straight quarters.
Under Kelley, a diversification push has included investing in five key overseas markets, and raising funds under management.
In yesterday’s statement, the company said it would look for new land sites, seeking out acquisitions, strategic equity investments and external collaborations.
It also raised concerns about “Qualifying Certificate” rules that designate locally-controlled developers as foreign entities if they have any foreign shareholders. Under the rules, developers are required to sell all units in a project within two years of completion or pay extension charges.
CapitaLand Ltd said in March the rules should be changed. The policy is an abnormality which penalises Singapore real-estate companies in their homeland, City Developments said.
CapitaLand has gained 23% this year, while City Developments has advanced 39%, outperforming the benchmark Straits Times Index’s 14% increase. — Bloomberg