REAL estate group Ho Bee Land : H13 0% posted a net loss of S$155.7 million for the six months ended Jun 30, 2023, from a net profit of S$149.9 million over the same period a year earlier.

Revenue fell 12.8 per cent to S$155.5 million over the same period, from S$178.3 million the year before. Loss per share for the period came in at S$0.2345, from earnings per share of S$0.2257 a year earlier.

In a bourse filing on Thursday (Aug 10), Ho Bee Land said this was mostly due to the unrealised fair-value loss of S$208.3 million it recorded for the group’s London portfolio, as well as higher interest costs.

It noted that the capitalisation rates used for valuation calculations of the London properties had risen to between 4.7 per cent and 8.5 per cent as at Jun 30, from rates of between 4.2 per cent and 7.7 per cent which were adopted as at Dec 31, 2022.

Interest costs also rose to S$76.3 million in the first half of this year, from S$33.2 million over the same period a year ago.

Still, the group noted that it generated net positive operating cash flow of S$77.4 million for the half-year period.

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Ho Bee Land chief executive Nicholas Chua said he expects market conditions to remain challenging as rising interest rates and declines in portfolio valuations impact the company negatively.

Nevertheless, he said the group’s diversified investment and development portfolio should help it counter these headwinds.

For instance, Chua said the group is on track to complete its biomedical development, Elementum, at one-north, in the last quarter of this year. It is about 90 per cent pre-committed and is expected to contribute to the group’s revenue in FY24.

Ho Bee Land shares fell 0.5 per cent or S$0.01 to S$1.98 on Thursday, before the results were released.