Executive Chairman & CEO’s Statement Despite the tough macro environment, the Company remained dedicated to our vision of being a leading integrated real estate and healthcare company. By leveraging our focused integrated real estate and healthcare strategy, we were steadfast in our endeavours to drive progress and forge ahead with our execution. Dear Stakeholders, FY2023 continued to be a challenging year for the global economy, marked by geopolitical tensions, interest rate hikes, core inflationary pressures and lay-offs across various sectors. Against this backdrop, the operating environment for our businesses in the core markets of Singapore and China remained difficult. Singapore registered modest economic growth while China saw its third year of property downturn since the COVID-19 pandemic, with major developers filing for bankruptcy and facing liquidation petitions. Despite the tough macro environment, the Company remained dedicated to our vision of being a leading integrated real estate and healthcare company. By leveraging our focused integrated real estate and healthcare strategy, we were steadfast in our endeavours to drive progress and forge ahead with our execution. NEW STRATEGIC SHAREHOLDER In FY2023, Perennial Holdings marked a major milestone with the addition of Perpetual Capital VCC (“Perpetual”) as its shareholder. Perpetual is an investment holding company principally backed by a sovereign wealth fund in the Southeast Asian region and managed by investment professionals with expertise and networks across Asia. Perpetual’s investment in Perennial Holdings is a strong endorsement of the Company’s vision, strategy and execution capabilities. FINANCIAL PERFORMANCE AND CAPITAL MANAGEMENT In FY2023, Perennial Holdings’ revenue was S$200.9 million, 24.6% higher than the S$161.3 million posted in FY2022. Earnings before interest and tax for the same period grew 81% to S$250.8 million from S$138.5 million in FY2022. Overall, Perennial Holdings’ profit after tax and minority interest for FY2023 was S$29.1 million, higher than the S$9.1 million in FY2022. As at 31 December 2023, Perennial Holdings’ debt-to-equity ratio stood at 0.74 times, lower than the 0.82 times registered as at 31 December 2022, largely attributable to the higher profit recorded, deconsolidation and repayment of borrowings and bank facilities. Taking into account the complexities and uncertainties in the global and domestic environments, we expect our financial performance in FY2024 to reflect a cautiously optimistic outlook. We will thus continue to adopt a proactive approach to capital management, while practising financial prudence in managing and operating our businesses. INTEGRATED REAL ESTATE AND HEALTHCARE BUSINESS REVIEW As at 31 December 2023, our real estate portfolio spanned approximately 80 million square feet (“sq ft”) in total gross floor area across four countries, including Singapore, China, Malaysia and Indonesia. Our healthcare portfolio comprises a total of about 22,000 beds, with more than 13,000 operational beds and a committed pipeline of close to 9,000 beds. In addition, our total asset value stood at S$8.3 billion, with development assets spanning approximately 80 million sq ft, indicating potential for expansion. Singapore The Singapore economy posted a 1.1% growth in 2023, down from the 3.8% expansion a year ago. Headline inflation was 4.7% in 2023, down from 6.1% in 2022. The inflation rate was impacted by the increase in the Goods and Services Tax rate from 7% to 8%. In the year, the Singapore government also raised Additional Buyer’s Stamp Duty rates, effective 27 April 2023, to proactively manage real estate investment demand and promote a sustainable property market. To counter these challenges, Perennial Holdings focused on driving the construction timeline of our development projects and enhancing the value of our operational properties through proactive asset management. We made significant headway at two of our large-scale integrated developments, 8 Shenton Way and Golden Mile Complex, which are undergoing major redevelopment works. At 8 Shenton Way, the demolition of the former office tower was completed to make way for the construction of Singapore’s tallest and first supertall building, defined as a structure above 300 metres. The iconic integrated development, towering 305 metres, is located in the Central Business District, and comprises residential, offices, hotel and retail components. It has been named The Skywaters, a reflection of its status as Singapore’s tallest building with unblocked views of the South China Sea. Its luxury residential component, Skywaters Residences, is gearing up for launch with the completion of its sales gallery, one of the largest locally constructed, on Bayfront Avenue. Additionally, an internationally renowned luxury hotel operator has also been appointed for The Skywaters’ hotel component, with the operator’s name to be announced in due course. With the appointment of the main contractor and the commencement of redevelopment works, the 63-storey landmark is slated for completion in 2028. At Golden Mile Complex, a renowned conservation landmark in Singapore, a team of conservation experts was appointed to ensure sensitive interventions in its redevelopment into a mixed-use integrated development comprising office, retail and residential components. Similar to The Skywaters, this historic building in the city commands panoramic sea and city views. The building’s provisional planning approval was secured in the year and special attention will be paid to retaining its key features and signature terraced profile. Meanwhile, Capitol Singapore and CHIJMES, two prime conservation properties within Singapore’s Civic District, refreshed their tenant mix to stay relevant to consumers’ evolving preferences. As at 31 December 2023, Capitol Singapore’s committed occupancy grew from 90% to 98% year-on-year ("YoY"), while CHIJMES continued to enjoy close to 100% committed occupancy. Capitol Singapore’s residential component, Eden Residences Capitol, also continued to set new sales price benchmarks with its sales prices in FY2023 exceeding their average over the past few years. Perennial Business City, the Company’s first business park project, completed its redevelopment works and obtained its full Temporary Occupation Permit (“TOP”) towards the end of FY2023. Separately, Perennial Holdings’ first pure-play residential project, Forett at Bukit Timah, was fully sold as at 31 December 2023 and its TOP is expected to be received in FY2024. 10 PERENNIAL HOLDINGS PRIVATE LIMITED
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