Southeast Asia's largest property developer, CapitaLand (Singapore Exchange: CATL-SG), on Wednesday announced that it had seen a 11.7 percent increase in full year profit, but is warning of "uncertain" and "unpredictable" conditions ahead.
The company oversees a global portfolio of assets worth 78 billion Singapore dollars (about $54.86 billion).
"CapitaLand has remained resilient and delivered a good set of results for the financial year," CapitaLand Chairman Ng Kee Choe, said in a company filing.
"Nonetheless, we face an uncertain and unpredictable operating environment and economic headwinds in Singapore and China , our core markets," he said.
CapitaLand said an improved operating performance helped it post a total profit after tax and minority interests (PATMI) in fiscal year 2016 of $1.19 billion Singapore dollars, which was 11.7 percent higher than the previous year.
The group's revenue for the fiscal year rose by 10.3 percent — driven by development projects in Singapore and China, the commercial portfolio in Singapore and the serviced residence business.
For the fourth quarter of FY 2016, PATMI reached 430.5 million Singapore dollars, a gain of 73.8 percent.
Concerning outlook
Singapore and China make up the lion's share of CapitaLand's asset base, comprising 36 percent and 44 percent, respectively. The two regions also account for more than 80 percent of total revenue, making the business particularly vulnerable to a potential downturn in either market.
"We are constantly looking at how we can rebalance our portfolio," CapitaLand President and CEO Lim Ming Yan, told CNBC's "Squawk Box."
"Our 36 percent now is something we are comfortable with, but having said that, we are constantly looking at opportunities across the different markets that we have a presence in."
The concern is particularly heightened in Singapore, where rising supply and limited new demand is clouding the outlook for the commercial property market.
"Office demand has really been down, seeing that the three key demand drivers of oil and gas, finance and shipping have all struggled over the last 18 to 24 months," said Nicholas Holt, Head of Research at Knight Frank, told CNBC.
Holt said office rents had fallen 25 perfect from their 2015 peak, with the sluggish macroeconomic environment dampening occupancy rates in the city state.
CapitaLand said the outlook for office occupancy and rental is expected to be muted, while the impact of property cooling measures will continue to weigh on the local residential market.
Despite the soft outlook, CapitaLand said its result was boosted by higher recurring income from CapitaGreen in Singapore, and other higher performing assets.