UPDATE 1-CapitaLand bullish on Singapore, China; profit falls

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SINGAPORE Feb 14 (Reuters) - Southeast Asia's largest property developer CapitaLand Ltd said it remains bullish on Singapore's housing market and China's long-term prospects despite reporting a 20 percent fall in quarterly profit.

CapitaLand, about 40 percent owned by Singapore state investors Temasek, reported net profit of S$476.6 million ($379 million) for the three months ended December, down from a restated S$596 million a year ago.

The property developer has about S$32 billion worth of assets, of which China makes up 38 percent and Singapore accounts for 34 percent.

"We expect our residential business in Singapore to remain healthy," Chief Executive Officer Liew Mun Leong said in a statement on Tuesday.

CapitaLand competes with Singapore rivals such as City Developments Ltd and Keppel Land Ltd, as well as Chinese developers including China Vanke Co Ltd .

Chinese residential property prices have fallen in recent months following the government's efforts to weed out speculation and cool the market. But authorities have begun easing controls, and China's central bank said earlier this month that banks must provide loans to first-time home buyers.

In Singapore, the government imposed new measures to cool the city-state's housing market in December, saying foreigners who buy private homes will have to pay an additional stamp duty equal to 10 percent of the property value.

CapitaLand's shares have surged about 31 percent so far this year on expectations China will further ease its monetary policy and relax restrictions on the property sector. Singapore's benchmark index is up 12 percent so far this year. CapitaLand's shares eased 0.7 percent on Tuesday.

The developer's quarterly profits were hurt by lower earnings from developments and smaller portfolio gains. Excluding revaluations and impairments, the firm's net profit for October-December dropped 41 percent to S$221.9 million, it said.

Analysts say Singapore home prices may soften but are unlikely to plummet due to strong underlying demand from the city-state's growing population.

Liew said CapitaLand was positive on China's property market in the long term as urbanisation, strong domestic consumption and increasing affluence underpin demand.

CapitaLand's shares have surged about 31 percent so far this year on expectations China will continue easing its monetary policy and relax restrictions on the property sector. Singapore's benchmark index is up 12 percent so far this year.

CapitaLand restated its 2010 earnings to make them comparable with the current set of results, which are based on a new accounting standard that took effect Jan 1.

The new accounting rule means CapitaLand's earnings from overseas development projects can only be recognised upon full completion, resulting in earnings that are more volatile and lumpy.

CapitaLand's board is proposing to pay out a final dividend of 6 Singapore cents per share and a special dividend of 2 cents per share for 2011, it said. The firm paid a first and final dividend of 6 Singapore cents for 2010.

CapitaLand plans to release new phases at two of its residential developments, the Interlace and d'Leedon, which are both just outside the central area. The firm also said it plans to launch a condominium project in Bishan, the north of Singapore. ($1 = 1.2559 Singapore dollars) (Reporting by Charmian Kok; Editing by Kevin Lim and Anshuman Daga)