Company Overview
CapitaLand Investment (CLI) is a prominent global real estate manager with significant operations across Asia. The company boasts a diversified portfolio spanning retail, office, lodging, and new economy asset classes. CLI has issued approximately 4,983.4 million shares, resulting in a market capitalization of S\$12,757.5 million (US\$9,463.3 million).
Stock Performance
As of March 2025, CLI’s share price stands at S\$2.56, with a target price (TP) of S\$3.95, reflecting an upside potential of 54.3% from the current price, although the TP has been slightly adjusted down from S\$4.04.
The stock has experienced a mixed performance over the past year, with a 52-week high of S\$3.20 and a low of S\$2.40. In the last month, its price increased by 4.5%, but it has faced challenges with a 6.6% decline over the past three months.
Financial Highlights
For the financial year ending December 2024, CLI reported revenues of S\$2,815 million, marking a modest year-on-year growth of 1.1%. The EBITDA saw a significant increase of 28.7%, reaching S\$1,421 million, while the core PATMI dropped by 10.2% to S\$510 million, primarily due to the absence of contributions from divested assets. Reported PATMI surged by 164.6% to S\$479 million, reflecting strong operational performance despite the divestitures.
Investment Strategy and Dividends
CLI has executed S\$5.5 billion in divestments during 2024, enhancing its capital efficiency and liquidity. This strategic move is expected to facilitate reinvestment into high-growth sectors such as logistics, private credit, data centers, and lodging. Notably, 66% of the divested assets remain under CLI-managed funds, ensuring continued asset control.
The company has committed to a higher dividend payout ratio of 50%, up from 30%, signaling strong confidence in its cash generation capabilities. Additionally, CLI has proposed a S\$0.12/share core cash dividend, alongside a special dividend-in-specie of 0.031 CICT units per CLI share, currently valued at S\$0.06/share.
Growth and Outlook
CLI has reported remarkable growth in its funds under management (FUM), which increased to S\$117 billion, a 20% growth driven by organic expansion and strategic acquisitions. The company aims to achieve a target of S\$200 billion in FUM by 2028, capitalizing on favorable macroeconomic conditions and potential market opportunities as financing becomes more challenging for competitors.
Recent acquisitions, including a 40% stake in SC Capital Partners and a 100% acquisition of Wingate, have strengthened CLI’s foothold in the Asia-Pacific region, adding S\$8 billion in FUM from Japan, S\$2 billion from Australia, and S\$3 billion from other Asian markets.
Performance by Sector
The lodging division has also seen significant expansion, adding 15,000 units across 85 properties, with a revenue per available unit (RevPAU) growth of 6% year-on-year. Key markets such as Japan and Korea experienced double-digit RevPAU growth, contributing to a robust outlook for this segment.
In contrast, the Real Estate Investment Business (REIB) remained stable, with operating EBITDA at S\$1.038 billion, supported by S\$230 million in portfolio gains. However, markets like China have faced challenges with negative rental reversion, while India continues to thrive, benefiting from strong demand in technology and finance sectors.
Earnings Revision and Recommendations
UOB Kay Hian has raised its 2025-2026 earnings estimates by 5-6%, aligning with CLI’s strong growth trajectory in FUM and improved earnings from its lodging and REIB segments. The recommendation remains a solid “BUY” with a revised target price of S\$3.95, reflecting adjustments based on updated market conditions and valuation methodologies.
Conclusion
CapitaLand Investment continues to demonstrate resilience and growth potential despite recent challenges. With a strong focus on strategic acquisitions, improved cash flow management, and a robust dividend policy, CLI is well-positioned for future growth in the competitive real estate market.
