Brief Overview
City Developments Limited has unveiled its ‘GET+’ three-year roadmap for FY27-FY29, positioning Singapore as its core market while executing a major exit from Australia across all sectors except hospitality assets. The strategic review targets S$5 billion of growth investments and S$6 billion of divestments to unlock value and achieve deleveraging goals. The company aims to establish a dedicated fund management platform to double assets under management to S$10 billion across listed and private platforms.
Investment Positives
The strategic review delivers several compelling growth drivers that strengthen CDL’s investment proposition. The roadmap provides greater clarity on capital allocation priorities and establishes a credible path to deleveraging, addressing a key concern for investors.
The S$6 billion divestment programme represents a significant value unlock opportunity, with over S$1bn billion of profit after tax and minority interests expected from divestment gains, equivalent to approximately S$1.12 per share. The monetisation strategy is well-diversified, comprising S$2.7 billion in commercial assets, S$1.8 billion in hotels, and S$1 billion in residential properties across the UK and Australia.
CDL’s fund management expansion offers particularly attractive prospects for sustainable growth. The dedicated fund management entity aims to double assets under management from S$5 billion to S$10 billion by FY29, encompassing both listed REIT platforms and an expanded private capital platform through funds, partnerships and joint ventures. This initiative supports a more capital-light growth model whilst building a recurring fee income stream and improving capital efficiency, potentially supporting higher return on equity over time.
The company’s development pipeline remains robust, with over S$6 billion of projected property development cash inflows from existing projects providing additional financial strength. The growth investment strategy is geographically focused, with 60% allocated to Singapore, 30% to China and Japan, and 10% to other markets across residential, commercial, hospitality and living sectors.
Outlook
The strategic review establishes four key financial targets that define CDL’s trajectory through FY29. The company aims to achieve a dividend payout of at least 35% of reported profit after tax and minority interests annually, whilst reducing net gearing from 75% as at 1H26 to 55% by FY29. The divestment programme targeting over S$1 billion of profit realisation, combined with the doubling of assets under management, positions the company for enhanced capital efficiency and sustainable growth.
Recommendation & Target Price
Phillip Securities Research maintains a BUY recommendation with an unchanged RNAV target price of S$11.32, representing a 25% discount to the RNAV of S$15.09. No changes have been made to existing forecasts following the strategic review announcement.
Frequently Asked Questions
Q: What is CDL's new strategic roadmap and timeframe?
A: CDL has unveiled the 'GET+' three-year roadmap for FY27-FY29, building on the Growth, Enhancement and Transformation strategy introduced in 2018, with Singapore positioned as the core market.
Q: How much does CDL plan to invest and divest under the new strategy?
A: The roadmap targets S$5 billion of growth investments and S$6 billion of divestments to recycle capital and unlock value, with over S$1 billion of profit after tax expected from divestment gains.
Q: What are CDL's key financial targets under the GET+ strategy?
A: The four key outcomes include a dividend payout of at least 35% of reported profit annually, reducing net gearing to 55% by FY29 from 75% at 1H26, realising over S$1 billion profit from divestments, and doubling assets under management to S$10 billion.
Q: Which geographical markets will CDL focus on for growth investments?
A: CDL will allocate 60% of growth investments to Singapore, 30% to China and Japan, and the remaining 10% to other markets, whilst largely exiting Australia except for hospitality assets.
Q: What is CDL's fund management expansion plan?
A: CDL plans to establish a dedicated fund management entity to scale assets under management from S$5 billion to S$10 billion by FY29, comprising listed REIT platforms and expanded private capital through funds, partnerships and joint ventures.
Q: How is the S$6 billion divestment target structured by asset type?
A: The divestments comprise 45% commercial assets, 30% hospitality, 20% legacy residential and other assets, and 5% living assets, including S$1.8 billion from CDL's directly owned hotel portfolio.
Q: What is the current investment recommendation for CDL?
A: Phillip Securities Research maintains a BUY recommendation with an unchanged RNAV target price of S$11.32, representing a 25% discount to the RNAV of S$15.09.
This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.
Disclaimer
These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products.
Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance.
Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries.
The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries.
Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
