‘We’re not deal junkies’: CapitaLand Investment CEO says potential M&As must help build long-term capabilities, drive share price
Remarks come as CLI posts a H2 net loss of S$142 million on China assets’ revaluation losses
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[SINGAPORE] CapitaLand Investment (CLI) is not pursuing merger and acquisition (M&A) opportunities “just for growth”, said the real asset manager’s group chief executive officer Lee Chee Koon on Wednesday (Feb 11).
This comes amid rumours of a potential merger between CapitaLand and Mapletree Investments that could create one of Asia’s largest real estate firms.
CLI is majority-owned by Singapore investment company Temasek, with a 54 per cent stake. Mapletree Investments is wholly owned by Temasek.
Citing an unnamed source, Dow Jones in November reported that the potential merger could be part of recent moves by Temasek-owned entities to evaluate options to reshape portfolio companies into stronger global entities.
Lee was speaking at a briefing on Wednesday accompanying CLI’s full-year results announcement. Sharp revaluation losses on China assets dragged down the performance, with CLI posting a S$142 million net loss in the second half ended Dec 31, reversing a net profit of S$148 million the year before.
These non-cash items, which stemmed primarily from the group’s investment properties in China, surged 68 per cent to S$439 million in H2, from S$261 million in the corresponding year-ago period.
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Portfolio gains – comprising profits or losses from divestments, acquisition adjustments and realised property revaluation – tumbled 91 per cent to S$18 million in the latest half-year, from S$195 million the year before.
While not naming Mapletree directly, Lee said any M&A deal “must make strategic sense” for the real estate group. In response to questions from The Business Times, he did not rule out the possibility of a merger with Mapletree.
However, the conditions – such as interest from both sides and the right pricing – must first align.
“If it’s not accretive, it doesn’t make sense, it doesn’t build long-term capabilities that allow us to drive new funds capabilities, (and) drive ROE (return on equity), it’s going to be very difficult for us to stand in front of our investors to explain why we want to do a certain transaction,” he said.
“We want to do good deals that really help to build the long-term capabilities for the company that can drive the share price.”
He added: “You need to find the right opportunity, the right timing. Not every deal that we look at is doable – that’s point No 1. And sometimes a deal does take time to happen.”
As an example, he cited serviced apartment provider Oakwood Worldwide, which CapitaLand’s wholly owned lodging business unit, The Ascott, acquired from Mapletree Investments in 2022. “I started looking at it in 2012,” he said.
“It’s like dating,” he added. “Sometimes you get married in a month, sometimes you take a few years, and sometimes you are almost going to get married, but decide that you cannot (go through with it).”
But he conceded that CLI needs M&A to meet its target of growing its funds under management to S$200 billion by 2028.
“In the last 12 months, you see our name appearing in different news, whether it is a platform in (South) Korea, a listed entity in Australia, a listed entity in Hong Kong, a hospitality platform with European origin... not all the news is correct,” he said.
“But yes, we are definitely actively looking at deals.”
While the results were affected by the revaluation losses on the China assets, CLI continues to see opportunity in the country.
Lee said the group plans to maintain an asset-light, recurring fee-led model in 2026, particularly in markets such as China. He noted that the group’s longstanding presence and strong reputation in the region has generated significant interest from capital partners.
This positions CLI “quite nicely” to expand its fee-led asset management business in China using third-party domestic capital, even as competitors exit the market.
Pointing to the company’s China real estate investment trust (Reit), CLI group chief operating officer Andrew Lim said: “This plays to our strength.”
The group’s first retail C-Reit launched in September 2025, and a second – this time with commercial assets such as offices and hospitality – is planned for this year, either late in the second quarter or early in the third.
“If we execute well, we can turn what is an uncertain environment into something that is positive and part of the growth story for the group,” Lim added.
For the full 2025 financial year, CLI’s earnings were S$145 million, down 70 per cent year on year from S$479 million. This was due mainly to lower portfolio gains and higher revaluation losses on the group’s China portfolio.
Revenue was S$2.1 billion, 24 per cent lower than the S$2.8 billion in FY2024. Full-year earnings per share stood at S$0.029, 69 per cent down from S$0.095 the prior year. An ordinary dividend of S$0.12 a share was proposed for FY2025.
Shares of CLI closed at S$3.06 on Wednesday, 3.5 per cent or S$0.11 lower.
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