Metro Group expanded its portfolio last year by acquiring a 20% stake in VisionCrest Commercial, a Grade-A office building along Penang Road in the prime Orchard Road area. (Photo: Metro Holdings)
Metro Holdings Limited (Metro Group) announced a $14.6 million net profit after tax for FY2024 during their May 24 financial results briefing, marking a 42% y-o-y decrease from the $25.3 million reported in FY2023.
“Metro’s profit has been impacted by prevailing market headwinds such as the high interest rate environment and the challenging China property market”, says Metro Group chairman Winston Choo.
The group’s borrowing costs increased by $4.1 million, while another $23 million in asset value was lost from evaluating the group’s investment properties. Its property division saw a 21.1% y-o-y drop in revenue, underpinned by a lower sales volume from its residential properties in Jakarta. The group also suffered a profit drop of $8.7 million through their stake in properties in the UK and Australia.
Read also: TE Capital-LaSalle JV completes purchase of VisionCrest Commercial, to carry out enhancements
The division’s rental revenue also hit with revenue from its GIE Tower property in Guangzhou, decreasing from $6.4 million in FY2023 to $5.5 million in FY2024. Rental revenue from its property at 5 Chancery Lane in the UK has also ceased since May 2023 due to ongoing asset enhancement works. Mainland Chinese property market challenges led to a $30.8 million loss through their stake in Top Spring International Holdings (Top Spring).
Meanwhile, the group’s retail division also reported a $4.1 million drop in profit, attributed to lower gross margins and increases in operating costs.
The group’s losses were partially mitigated by recognising the negative goodwill value from acquiring an additional 6% stake in Top Spring in January. The difference between the purchase price and its fair value, determined by professional valuer's report, resulted in the a profit of $60.3 million for Metro Group.
Metro Group expanded its portfolio last year by acquiring a 20% stake in VisionCrest Commercial, a Grade-A office building along Penang Road in the prime Orchard Road area. The 11-storey freehold property has 148,854 sq ft of net lettable area with an 89.5% occupancy and a weighted average lease expiry of 2.2 years as of March.
The occupancy rate for the group’s other four investment properties — GIE Tower in Guangzhou, Metro City and Metro Tower in Shanghai, and Asia Green in Singapore — dropped to 84.5% as of March, from 89.8% as of March 2023.