Singapore's CapitaLand is expected to sustain earnings growth this year on strong condominium sales in China and a resurgence at home, where residential prices rose last year for the first time in five years.

Boosted by China condo sales, contributions from hotelier Raffles Holdings and gains from investments in Australia, CapitaLand earned a net profit of S$120.7 million (HK$575.76 million) in the quarter to end-December. That compared with analysts' forecasts for a S$71.2 million profit and with a year-earlier restated net loss of S$82.8 million, when CapitaLand booked a S$162 million writedown on assets in Singapore, where property prices are down 38 percent from 1996 peaks before the Asian financial crisis. Like its smaller Singapore-based rival Keppel Land, CapitaLand is reaping strong profits from its foray into Shanghai's booming property market, seeking growth that Singapore's small market cannot offer.

Keppel Land last month reported an 85 percent jump in quarterly net profit due to strong apartment sales in Shanghai and investments in Vietnam and Thailand.

For the full year, CapitaLand earned S$313.0 million, tripling 2003's S$102.6 million net profit.

``2004 was a much brighter year with market conditions and sentiment in Singapore and the region improving,'' it said. The group said its 2005 prospects were positive based on favorable operating conditions in regional markets, with Australasia remaining a strong contributor to earnings. The company is considering setting up new property funds in Japan, China, Malaysia and Thailand this year.

It has formed a US$65 million (HK$507 million) residential property fund in China and a Japan retail property fund with an initial US$100 million commitment.

CapitaLand has a target of generating 75 percent of its revenues and pretax earnings from abroad. Its overseas operations accounted for 80 percent of pretax profit in 2004.

It also plans to expand a newly set-up business segment targeted at developing integrated leisure and convention resorts, including casinos.

In January, CapitaLand said it was working with US casino operators MGM Mirage and Kerzner International separately to submit two project ideas for Singapore's first casino resort. Chief Executive Liew Mun Leong said the potential partners were looking at an investment sum of around US$1 billion each.

The company has a majority stake in Raffles, owner of Singapore's landmark Raffles Hotel, which on Friday posted a near four-fold rise in quarterly profit to S$36.0 million.

REUTERS