Monday, 25 May 2015

[Straits Times] Property investment: CDL replies

WE THANK Mr David Goh Chee Hoe for his views on property investment ("Property investment won't narrow income gap"; Thursday).
The property market is cyclical in nature and can be impacted by changes in the regulatory environment, recessions and global financial crises.
But such externalities do not just affect the property sector alone.
Other financial instruments, such as stocks and shares, saw prices spiralling downwards within a short timeframe, and many were severely impacted.
City Developments (CDL) has always advocated that property investment must be viewed with a medium to long-term perspective.
History has also shown that real estate assets still remain a relatively stable investment in Singapore.
Genuine buyers have benefited from recurring income and reaped substantial capital gains in property appreciation over time.
Although the purchasing power of money has eroded with time, any class of property bought years ago will, today, be worth many times more in value.
For this reason, property investment can help narrow the income divide.
Investment is a means to help grow your money. Investors are in the best position to evaluate their risk appetite and match suitable classes of assets to diversify their investment portfolio. Property can be part of the basket of assets.
Mr Goh suggested that CDL should have paid out at least 75 per cent of our net profit as dividends during the period of the property peak.
CDL takes a long-term view of our business, and, as a responsible company, we are duty bound to ensure that we continually enhance value for our shareholders.
In addition to dividend payouts, profits are reinvested for strategic growth and future expansion of the company.
The war chest also enables us to mitigate headwinds that may impact our business, particularly during an economic downturn.
CDL's dividend payout ratio is, in fact, at the top end of comparable developers in Singapore.
Belinda Lee (Ms)
Corporate Communications
City Developments