Fragrance expands overseas, records recurring income

Despite the sluggish economy, 2018 proved to be a successful year for property developer Fragrance Group, winner in the property sector under the Centurion Club Awards.

The company’s revenue soared 64.7% y-o-y to $326.2 million, from $128.2 million in FY2017. Earnings rose 448% to $266 million. The company has attributed the increase to a one-off disposal gain of a property in Melbourne.

While it generated mainly development income in its early years, Fragrance has been actively building up its recurring income stream after achieving a certain scale. Apart from significant purchases, such as paying $380 million for the former NOL building in Singapore, Fragrance has been buying up properties overseas.

In FY2018, the company started to book full-year rental revenue contribution from commercial properties, as well as full-year hotel operations income from ibis Styles Hobart in Australia and The Imperial Hotel in the UK. The Hobart property commenced operations in July 2017, and The Imperial was acquired in February 2017.

Other investment properties in the UK such as The Crown Hotel, Lyndene Hotel, St Chads Hotel and The Townhouse Hotel remain stable sources of recurring income for the group.

In Australia, Fragrance has been actively working on development projects such as Premier Tower and NV Apartments, which were 41.5% and 78.3% respectively completed as at end-March.

In Singapore, the rental rate of its office space rose 7.4% in FY2018, compared with 0.4% in FY2017.