Chairman Statement
Amidst a challenging and volatile global landscape, the Group remained resilient and adapted to changing market conditions across our key markets in the People’s Republic of China (“PRC”), the Netherlands, Germany and Australia. Although our strategy of having a diversified portfolio and business approach of capitalising on opportunities have allowed us to remain profitable, the prolonged slowdown in the PRC real estate sector continues to be a heavy burden for the Group. Despite these difficulties, the Group reported a net profit of S$93.0 million for FY2024, a very substantial increase of more than six times from the S$12.5 million reported for FY2023. I would also like to take this opportunity to express my deepest gratitude to the management team and our employees, especially our Chinese colleagues, for their dedication, hard work and sacrifices in steering the Group through a challenging year.
Considering the aforesaid set of results and our confidence in the long-term prospects of the Group, the Board has recommended a final tax-exempt (one-tier) cash dividend of 3.55 Singapore cents per share for FY2024. If approved, the total dividend declared for FY2024 will be 4.65 Singapore cents per share, representing a 10.7% growth from FY2023.
Group Performance
The Group achieved a very substantial increase in annual net profit to S$93.0 million in FY2024, which is significantly higher than the S$12.5 million achieved for FY2023. The increase in net profit was due mainly to the maiden profit contribution from NSI N.V. (“NSI”), as an associated company of the Group, as well as higher fair value gain and net gain on settlement from financial derivatives, although this was partially offset by higher foreign exchange losses and higher net finance costs arising from higher interest rates and average borrowings.
As at 31 December 2024, the total shareholders’ equity of the Group (inclusive of perpetual convertible capital securities and excluding non-controlling interests), consolidated gross borrowings and consolidated net gearing ratio amounted to approximately S$2,265.6 million, S$1,304.2 million and 0.47 respectively.
The Group continues to adopt a foreign exchange risk management strategy that takes into account the changing business and economic outlook of the various regions that the Group operates in. To-date, the Group has substantially hedged all its foreign currency exposure, namely the Euro, Chinese Yuan Renminbi Offshore (“CNH”) and Australian dollar, arising from its overseas assets through a combination of (i) foreign currency debts, and (ii) financial derivatives that create corresponding foreign currency liabilities. Arising from the various geopolitical and economic risks which could have a significant impact on foreign currencies, the Board will continue to closely monitor the Group’s foreign exchange risk management strategy and adjust it from time to time as appropriate. This includes assessing the implications of the possibility of cash outflows arising from mark-to-market losses of the outstanding financial derivatives and/or upon the maturity of such financial derivatives when they are not in-the-money, and the associated adverse accounting impact caused by any unanticipated adverse turn in financial market conditions e.g., a sudden depreciation in the Singapore dollar.
Property Development
In the PRC, pre-sales of the Group’s property development projects remained subdued in FY2024, despite the easing of property-related measures and pro-market fiscal and monetary policies introduced by the PRC government during the year. Looking ahead, further pro-market policies are anticipated in 2025 to help stimulate market recovery. As such, the Group is cautiously optimistic of an eventual turnaround. We will continue to rally our partners to jointly adopt a longer-term perspective on the sales cycle without significantly compromising on selling prices. All of the PRC property development projects under construction are at an advanced stage of development with completion expected to be within 2025. Some of these projects have already achieved partial completion and commenced handover.
In the Netherlands, the progress of the Dreeftoren Amsterdam redevelopment has unfortunately faced some further delays due to technical issues encountered during the construction of the three-storey base of the residential tower. As a result, the targeted completion date for the residential tower has been revised to 4Q2026. Whilst construction on the office tower is ongoing and completion is expected to be in 3Q2025, the occupation of the office tower may be affected by the delay in the residential tower’s delayed timeline due to their close proximity. As for our freehold Meerparc Amsterdam redevelopment, the Group is working with the municipality to finalise and sign the various agreements related to the redevelopment in 1Q2025, with construction estimated to commence in 2026. The Meerparc Amsterdam redevelopment project will transform the current 19,143 sq m office (70%) and industrial (30%) property into a 50,000 sq m mixed residential (60%) and office (40%) property. The residential portion will comprise 55% midrent and 45% free-sector apartments.
In Australia, the construction of Sydney House (previously known as Pitt Street Central Project or City Tattersalls Club Project) in Sydney is progressing well. The main contractor works are approximately 44% completed as at 18 February 2025 based on working days for the contract works. In September 2024, the Group seized the opportunity to acquire the commercial space of this project. This will enable the Group to not only own and maximise the full commercial potential of this partially heritage-listed property primely located in the heart of the Sydney CBD, but to also utilise part of the commercial space to enhance the capacity and facilities of Sydney House Hotel, the hotel component of the project.
Skyline Garden, Dongguan, PRC
All five blocks comprising 1,194 residential units in the 27%-owned Skyline Garden in Dongguan are almost fully sold and handed over prior to FY2024. The six low-rise SOHO blocks which have been reserved by purchasers will be eligible for sale from July 2025 as per land tender conditions. The single high-rise SOHO block will be eligible for sale from 1Q2027 and is approximately 15% reserved.
Time Zone, Dongguan, PRC
Construction on a substantial portion of the originally approved commercial gross floor area (“GFA”) in the 17.3%-owned Time Zone was put on hold, pending approval from the authority regarding the rezoning of the aforementioned commercial GFA, encompassing three office towers (198,100 sq m) and four SOHO blocks (308,900 sq m, including a 40,000 sq m hotel), into residential GFA. Completion for the rezoning exercise is expected to be in 1H2025.
On the residential component, Phase 1.1 has commenced handovers for all its six residential blocks and two SOHO loft blocks. Phase 1.2 began handover of two residential blocks in late 2024, with the remaining five residential blocks and two SOHO blocks expected to commence handovers in batches in 2025.
Central Mansion, Dongguan, PRC
The 36%-owned Central Mansion has launched four residential blocks comprising 386 units for pre-sales and achieved a sales rate of 29% with an average selling price of approximately RMB35,100 per square metre (“psm”). Two of these residential blocks commenced handover on 31 December 2024.
All buildings in Phase 1 of Central Mansion have either been completed or are near completion, whilst construction of Phase 2, comprising one residential block and one SOHO block, is on hold at ground level.
Fenggang Project, Dongguan, PRC
During the rezoning exercise for the Fenggang project in FY2024, the project company decided that the next best course of action was to put up the residential development land for sale via a public land tender to be conducted by the Dongguan Land Bureau. In this way, the project company no longer needs to directly pay the land conversion premium.
The public land tender by the Dongguan Land Bureau is expected in 2H2026, and the project company may participate in the tender. In the event the public land tender is won by a third party, the project company will be compensated for the costs previously incurred in resettling the original inhabitants.
Primus Bay, Guangzhou, PRC
The 95%-owned Primus Bay has launched six residential blocks comprising 539 units for pre-sales and achieved a sales rate of 24% at an average selling price of approximately RMB22,700 psm. These six launched blocks have commenced handover of the sold units in FY2024.
Exquisite Bay, Dongguan, PRC
The 46.6%-owned Exquisite Bay has launched three residential blocks comprising 271 units for pre-sales and achieved a sales rate of 39% at an average selling price of approximately RMB23,900 psm. The project commenced its first handover of the sold residential units in mid-2024.
Egret Bay, Dongguan, PRC
The 27%-owned Egret Bay has launched all seven of its residential blocks comprising 383 units for pre-sales, including the latest block launched in August 2024. It has achieved a sales rate of 53% with an average selling price of approximately RMB39,200 psm. The project is expected to commence its first handover of the sold residential units in 2Q2025.
The Brilliance, Dongguan, PRC
The wholly-owned The Brilliance has launched three residential blocks comprising 323 units for pre-sales and achieved a sales rate of 20% with an average selling price of approximately RMB21,300 psm. The project is expected to commence its first handover of the sold residential units in March 2025.
Kingsman Residence, Dongguan, PRC
The 50%-owned Kingsman Residence has launched three residential blocks comprising 308 units for pre-sales in September 2023. It has achieved a sales rate of 22% with an average selling price of approximately RMB19,500 psm. The project is expected to commence its first handover of the sold residential units in March 2025.
Millennium Waterfront Project, Chengdu, PRC
The wholly-owned Millennium Waterfront Plot E1 launched 289 SOHO units for pre-sales, out of a total of 2,228 SOHO units in two blocks. 129 units were sold at an average selling price of RMB7,200 psm. The first handover of the sold units commenced in May 2024.
Furthermore, unsold units from one of the SOHO blocks have been marketed for leasing, for which, 184 units (or 19% of the unsold units from this SOHO block) have been leased to third parties, including hotel and office operators.
Dreeftoren Redevelopment, Amsterdam Southeast, the Netherlands
The redevelopment of the wholly-owned Dreeftoren has seen its timeline delayed as a result of technical issues encountered during the construction of the three-storey base of the residential tower. This includes the recent temporary construction halt since early January 2025 to conduct additional verification testing after the installation of the first prefabricated floors above the base in 4Q2024.
The Group is currently working towards a 4Q2026 completion date for the residential tower. Whilst construction on the office tower is ongoing and completion is expected to be in 3Q2025, the occupation of the office tower may be affected by the delay in the residential tower’s delayed timeline due to their close proximity.
Meerparc, Amsterdam, the Netherlands
Amidst discussions with the municipality to redevelop the freehold wholly-owned Meerparc, the Dutch government enacted a new national law on affordable housing on 1 July 2024, which is applicable to this project. The Group is working with the municipality to finalise and sign the various agreements related to the redevelopment, which are expected to be finalised in 1Q2025.
Construction on this project is estimated to commence in 2026. In the meantime, part of the existing building will serve as the temporary office premises for the existing sole tenant of the adjacent Zuiderhof I building which is 33%-owned by the Group, and scheduled to undergo a major renovation starting in mid-2025.
16-19 Prins Hendrikkade, Amsterdam, the Netherlands
The approval of the building permit for the wholly-owned Prins Hendrikkade property was obtained in November 2024. Renovation work is expected to commence in early April 2025 and be completed before the end of 2025.
Redevelopment of this property will involve renovating the existing four adjacent monumental buildings to accommodate approximately 2,500 sq m lettable floor area of office space and five free-sector rental residential units.
Sydney House, Sydney, Australia
Construction of Sydney House (previously known as Pitt Street Central project or City Tattersalls Club project) is progressing well since its commencement in March 2023, and the development is expected to be completed in 3Q2027. The works as at 18 February 2025 are approximately 44% completed based on working days for the contract works.
The Group also seized the opportunity on 20 September 2024 to acquire the commercial space of this project for a consideration of A$24.7 million.
Property Holding
The property holding segment continued to play a pivotal role in driving the Group’s performance in FY2024. With the European properties being the key driver, the portfolio recorded an operating income of €52.6 million in FY2024, representing a 12.6% increase compared to FY2023. The increase was due mainly to the improved operating performance of the Hampton by Hilton and Crowne Plaza Utrecht Centraal Station hotels (the “Poortgebouw Utrecht” hotels) and the Dutch Bilderberg hotels, with the Bilderberg Hotel De Keizerskroon and the Bilderberg Europa Hotel Scheveningen becoming major contributors in FY2024 after undergoing extensive renovations in 2023. Higher office income contribution from the Mondriaan Tower as a result of higher occupancy rates and the full year contribution from the Allianz Tower which was acquired in September 2023 also played a part in the stronger performance.
The Group is also looking forward to its strong pipeline of projects which, when completed, may further enhance the Group’s recurring income. In the near term, this includes both the Puccini Milan hotel and Prins Hendrikkade Amsterdam which are expected to complete their redevelopments in FY2025. Subsequently, the Dreeftoren Amsterdam office and residential developments are expected to be completed in 3Q2025 and 4Q2026 respectively, with both to become operational in FY2026, followed by the Sydney House Hotel, Galleria and the remaining commercial components in FY2027 and the Meerparc Amsterdam redevelopment in FY2028.
Furthermore, the Group has commenced the major renovation project at the 50%-owned Le Méridien Frankfurt. The project involves the complete refurbishment of all 80 rooms in the Palais wing and the addition of 29 new rooms to the current 300-room inventory, and is expected to be completed in 3Q2025. The permit for the additional rooms is expected to be granted by March 2025.
Seizing another unique acquisition opportunity, the Group has through cumulative acquisitions in FY2024 become the largest shareholder1 of NSI with an approximately 22.0% equity stake in its total issued share capital as at 31 December 2024. Following the appointment of the Group CEO and Executive Director of the Company to the NSI Supervisory Board on 30 September 2024, the investment in NSI has been reclassified from an investment carried at fair value through profit or loss to being accounted for as an associated company of the Group from the appointment date. The Group recognised a share of profit from NSI amounting to S$93.3 million in the Group’s 2H2024 profit, based on the unaudited financial statements2 of NSI as at 31 December 2024.
1 Based on the substantial shareholding filing with the Dutch Authority for the Financial Markets (AFM)
2 NSI 4Q2024 unaudited results published on 28 January 2025 (https://nsi.nl/ir/nsi-publishes-2024-preliminary-results/)
The Netherlands
Bolstered by the reopening and improved performance of the extensively renovated Bilderberg Europa Hotel Scheveningen and Bilderberg Hotel De Keizerskroon, the 95%-owned Dutch Bilderberg hotel portfolio recorded earnings before interest, tax, depreciation and amortisation (“EBITDA”) of €9.3 million in FY2024. This represents a 54.8% increase over the EBITDA of €6.0 million achieved in FY2023.
The 33%-owned Hilton Rotterdam hotel recorded an improved EBITDA of €3.9 million for FY2024 (FY2023: €3.3 million), on the back of stronger meeting revenue and more efficient cost control as average daily rate (“ADR”) and occupancy remained relatively stable at €167 (FY2023: €167) and 70.9% (FY2023: 70.6%) respectively.
The wholly-owned Poortgebouw Utrecht hotels continued their strong performance in FY2024 and were able to further increase their average occupancy to 88.4% (FY2023: 86.1%). Combined with a higher ADR of €140 (FY2023: €134) and improved meeting revenue, this led to a stronger FY2024 EBITDA of €6.5 million (FY2023: €5.5 million) for the two hotels.
Germany
Due to a slightly lower occupancy of 66.2% (FY2023: 67.6%), the 94.9%-owned Bilderberg Bellevue Hotel Dresden recorded an EBITDA of €3.9 million for FY2023, just below the €4.0 million recorded in FY2023.
The 50%-owned Le Méridien Frankfurt recorded higher ADR of €155 in FY2024 (FY2023: €150) but this was offset by lower occupancy of 58.6% (FY2023: 59.2%). As a result, the hotel recorded an EBITDA of €1.6 million in FY2024, consistent with that of FY2023.
The Group is working on a major renovation of the Palais wing which involves the complete refurbishment of all 80 rooms and the addition of 29 new rooms to the current 300-room inventory. The permit for the additional rooms is expected to be granted by March 2025 and completion of the renovation is expected to be in 3Q2025.
The PRC
The challenging PRC market conditions weighed heavily on the hospitality front as well, with weak demand from the events and meetings segment for both the Crowne Plaza and Holiday Inn Express hotels in Chengdu (the “Chengdu Wenjiang” hotels). In light of this, the hotels recorded lower occupancy rates, ADR and lower F&B revenue which resulted in a lower EBITDA for FY2024 amounting to RMB14.7 million (FY2023: RMB21.2 million). Despite the drop, FY2024 still marked the second-strongest EBITDA recorded by the hotels since commencement of operations.
The retail podium, located on the lower floors of the two SOHO blocks at Millennium Waterfront Plot E1, will be retained for long term recurring income and has been reclassified from development properties to investment properties during FY2024. Operations of the retail podium began in June 2024 and approximately 78% of the retail podium has been leased. Active engagement is currently underway with prospective tenants for the remaining spaces.
In December 2024, the Group entered into an agreement to further divest a 44% equity interest in the Wentang Recycling Factory, valuing the industrial property at approximately RMB84.8 million. This represents a premium of approximately 110% over the Group’s cost. On 11 March 2025, the Group further entered into a supplementary agreement with the same buyer to dispose of the remaining 5.5% equity interest in the property, valuing the property at the same amount mentioned above. To-date, the Group has received a deposit of RMB16 million. The disposal of the Group’s entire 49.5% equity interest in the Wentang Recycling Factory is expected to be completed by 31 March 2025.
The challenging PRC economic environment has also weighed on property financing opportunities, adversely impacting the Group’s property financing segment. Whilst there was some growth in the Australian loan book relating to Sydney House, the loss of revenue from the PRC market was more significant, resulting in revenue from the property financing segment shrinking by 14.3% from S$52.4 million in FY2023 to S$44.9 million in FY2024. The PRC property financing loan book stood at approximately RMB858.8 million as at 31 December 2024, a significant drop from the RMB1,210.2 million as at 31 December 2023.
With construction of Sydney House progressing well, the Group is expecting to disburse more loans from FY2025 onwards to the various stakeholders of the project in Sydney. As such, interest income from the Australian property financing segment is expected to improve over the next few years.
In December 2024, the Group commenced legal action against a borrower in the Shanghai court to recover an outstanding loan principal of RMB375.8 million. The borrower had breached the loan amortisation plan which was agreed upon with the Group in September 2024. The legal action taken included the placement of preservation orders on the collateralised properties located in the prime Shanghai Pudong New Area, with a valuation of approximately RMB1.4 billion, and certain bank accounts. Considering the outstanding loan principal against the valuation of the properties which have been placed on “first caveat” by the Group, the “claim-to-preservation value” ratio is at a comfortable level of 27%. The first hearing has been scheduled to take place in March 2025.
Corporate Social Responsibility
In light of the increasing focus on sustainability, the Group remains committed to Corporate Social Responsibility (“CSR”). While maintaining its commitment to supporting the communities in which it operates, the Group recognises that recent global developments—including economic volatility, environmental challenges, and social disparities—have further highlighted the importance of sustainable and responsible business practices. In response, the Group remains focused on driving longterm positive impact through strategic initiatives that align with global sustainability objectives. For FY2024, CSR activities were undertaken by the Hilton Rotterdam, the Poortgebouw Utrecht hotels, the Bilderberg Bellevue Hotel Dresden, the Dutch Bilderberg hotel portfolio and the Chengdu Wenjiang hotels. In addition, First Sponsor Group Limited’s Singapore branch was awarded the Charity Bronze Award 2024 from the Community Chest for the donation of S$50,000 that was contributed in FY2023. The Community Chest is the philanthropy and engagement arm of the National Council of Social Service in Singapore and its donations go towards more than 100 social service agencies supported by them.
In terms of social initiatives, among others, the Hilton Rotterdam team participated in (i) revitalising the garden at the Elderly Home Borgsate where the team placed vibrant flowers and lush plants; (ii) donating old printer cartridges to the CliniClowns program which collects and sells used toners from copiers and printers and sells them to raise funds which are then used to send clowns to visit and entertain children in hospitals; (iii) working with Stichting NAS to donate the hotel’s old furniture to people who were previously homeless and have since secured accommodation; (iv) organising a charity sale which raised €2,500 from the hotel team which will be donated to 4 different charities; and (v) hosting a dinner in the Hilton Rotterdam for the less fortunate citizens of Rotterdam who live in poverty and social exclusion. The Poortgebouw Utrecht hotels team visited the Ronald McDonald Huis Utrecht, a local charity dedicated to supporting families with sick children in their time of need. The team served a dinner for the parents, siblings and other relatives who stayed over in the living rooms of the Ronald McDonald Huis Utrecht whilst their sick children were in the hospital. The Hampton by Hilton Utrecht Centraal Station team also (i) sold 57 stuffed animals to raise €1,000 for the Ronald McDonald House; (ii) participated in ‘mag ik dan bij jou’, a program by the children’s hospital Wilhelmina Kinderziekenhuis (“WKZ”) which provides hotel rooms to accommodate parents whose children are in WKZ if the Ronald McDonald House at the WKZ is full; (iii) wrote over 350 Christmas cards in connection with the National Foundation for the Elderly’s annual Christmas card campaign. These cards are then sent to elderly people in the Netherlands who receive little to no visitors during the holiday season. The Poortgebouw Utrecht hotels team also continued their participation in (i) the ‘Hotels for Trees’ program in which a tree is planted each time hotel guests opt out of their daily room cleaning and (ii) the ‘Too-good-to-go’ app which allows anyone using the app to purchase clean breakfast leftovers at a discount. In Germany, the Bilderberg Bellevue Hotel Dresden team continued with their programs from previous years such as the hosting of vocation school teachers from Kazakhstan in the fields of hospitality and gastronomy to better understand the German dual school system and it also continued its Wunschweihnachtsbaum event, which is organised annually together with Kindervereinigung Dresden e.V. to grant Christmas wishes to socially disadvantaged children.
The Group’s engagement with its communities goes hand in hand with its commitment to environmentally sustainable practices. In FY2024, the Dutch Bilderberg hotel portfolio continued with their ‘Good Roll’ initiative, using 100% tree-friendly and sustainable toilet rolls and the program donates 50% of its net profit to building toilets in Africa.
In the PRC, the Chengdu Wenjiang hotels held their annual 12 May charity sale activity in remembrance of the devastating earthquake that struck Wenchuan on 12 May 2008. The Chengdu Wenjiang hotels raised RMB20,000 which was donated to the China Soong Ching Ling Foundation which then uses these funds to help disabled children under their care. Furthermore, the Chengdu Wenjiang hotels team visited the Dujiangyan Special Education School which cares for children with intellectual and hearing disabilities and donated RMB2,000 to their scholarship program.
Supporting programs that promote social cohesion, environmental sustainability, and meaningful connections between businesses and communities remain a key target of the Group.
Future Prospects
With the successful issuance of perpetual convertible capital securities in September 2024, the substantial unutilised committed credit facilities available and the potential equity infusion from the exercise of outstanding warrants, the Group is in a good financial position to navigate through the economic challenges arising from the difficult market conditions, especially in the PRC, and to also capitalise on any favourable business opportunities that may arise.
In the first three months of 2025, the market saw a total of 50bps rate cut from the European Central Bank and 25bps rate cut from the Reserve Bank of Australia. Any further interest rate cut in the regions that the Group operates in, namely the EU, the PRC and Australia, would have a positive impact to the Group in the form of lower financing costs as well as possibly better valuations arising from a lower discount rate.
Appreciation
The strength of the Company today is built upon the trust and dedication of our stakeholders. On behalf of the Board, I would like to extend my heartfelt appreciation to all who have contributed to our ongoing journey. To my fellow Directors, your strategic vision and leadership have been instrumental. To our shareholders, customers, business partners, and financial institutions, your support is the thriving force behind our growth. As we enter FY2025, we remain committed to overcoming challenges and seizing new opportunities together.
Ho Han Leong Calvin
Chairman
12 March 2025