CapitaLand's game plan to achieve 8% ROE

TWO of the biggest drivers for CapitaLand in the future will be its ability to continue its asset recycling programme and asset-light expansion.

Both will be key for the property group to achieve its target return on equity (ROE) of 8 per cent. Already, it is well on track to meet - even exceed - that target, with its annualised ROE at 10 per cent for the first nine months of fiscal year 2017, according to Morgan Stanley Research.

CapitaLand's management said last November that it plans to maintain its current run of S$3 billion in divestments each year. According to Morgan Stanley, close to half the group's earnings is already derived from revaluation and divestment gains.

Its announcement two weeks ago of its sale of 20 malls in China, mostly in tier-two and -three cities, to a consortium led by China Vanke for S$1.7 billion is a clear illustrat…