CDL flags ‘significantly weaker’ performance for H2 2026

[SINGAPORE] Fresh from announcing the roll-out of a comprehensive strategic review, City Developments Ltd flagged that it expects to post a “significantly weaker” financial performance for its second half ending Dec 31.

Certain capital-recycling deals that the Kwek-controlled group had earlier expected to materialise in the rest of FY2026 are now expected to be completed in FY2027, it said in a third-quarter business update on Wednesday (Nov 11).

This comes “in contrast to” the second half of 2025, when the group reported a capital-recycling gain of S$473.1 million from the divestment of South Beach Consortium.

CDL added that the anticipated weaker H2 performance is “compounded by adverse foreign exchange movements, particularly the appreciation of the Korean won against the Singapore dollar since July”.

The group is also currently undertaking valuations of its property portfolio, which it noted “may give rise to impairment losses”.

As at Sep 30, its China office portfolio “continued to face market challenges”. The group said that it is “actively pursuing divestment initiatives and optimisation opportunities in line with its capital-recycling priorities”.

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The property giant had at end-September unveiled a plan focused on capital recycling and deleveraging, targeting S$6 billion in divestments by FY2029 to recycle capital from mature, non-core or underperforming assets.

It aims to achieve a gearing of 55 per cent by FY2029, representing an estimated 20-percentage-point reduction in net gearing.

CDL’s net gearing ratio was 75 per cent as at Sep 30, largely due to the acquisition of two government land sale sites in Tanjong Rhu Road and Peck Hay Road in H1.

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The group partnered Hong Realty to buy the prime Peck Hay Road parcel for S$542.4 million, and tied up with Woh Hup to pick up the Tanjong Rhu plot for S$709 million.

CDL said its interest cover now stands at 2.7 times and that its debt expiry profile remains healthy, with cash reserves of S$2.1 billion and a “robust liquidity position, supported by S$4.8 billion in cash and available committed credit facilities”.

“There are no material concerns over the group’s ability to fulfil its near-term debt obligations,” it added.

In Q3, CDL and its joint-venture associates sold 124 units in Singapore with a total sales value of S$322.6 million. This compares with 88 units worth S$313.2 million a year earlier.

With no new launches during the quarter, sales were primarily from existing projects such as Norwood Grand and The Myst, the group said. Both properties, which are 96 per cent and 99 per cent sold, respectively, have obtained their Temporary Occupation Permits.

For the nine months ended Sep 30, the group and its joint-venture associates sold 476 units totalling S$1.2 billion, largely driven by the 246-unit freehold Newport Residences.

The group’s Singapore office portfolio had a committed occupancy of 97.4 per cent, sustaining positive rental reversions for three quarters in 2026.

Two new Grade A office developments, Newport Tower and Union Square Central, are on track for completion in 2027 and 2028, respectively. CDL expects an anticipated supply crunch to “provide a supportive backdrop for leasing activities”.

CDL’s retail assets had an overall 97.1 per cent committed occupancy, with Palais Renaissance reaching 100 per cent.

Global hotel operations had higher revenue per available room (RevPAR), up 6.4 per cent to S$175.20 for 9M 2026, from S$164.60 the year before. RevPAR grew in Australasia (11.8 per cent), Singapore (3 per cent), Europe (4.7 per cent) and New York (8.9 per cent), CDL said.

“The global operating environment remains challenging, characterised by heightened geopolitical uncertainties, financial market volatility and evolving macroeconomic conditions,” the group noted.

Against this backdrop, it “remains focused on sustaining operational momentum across its core businesses while navigating these headwinds”.

Shares of CDL closed 1.2 per cent or S$0.09 lower at S$7.12 on Wednesday, before the update.