CDL eyes chances to unlock value from commercial portfolio, keeps options open for mature assets

[SINGAPORE] City Developments Ltd (CDL) sees openings to unlock value in its commercial portfolio, with mature assets in line for possible divestment.

A spokesperson for the international real estate operating company told The Business Times that the group sees “ongoing opportunities” for asset enhancement initiatives (AEIs), asset repositioning, selective divestments and capital partnerships in its portfolio of office, retail and industrial properties.

For example, a S$50 million AEI at its City Square Mall in Kitchener Road added about 26,000 sq ft of gross floor area (GFA) to the property, and racked up a positive rental reversion of 9.7 per cent on renewed leases post-revamp.

If an AEI can “meaningfully improve” rental reversion, tenant quality and overall valuation, and projected returns are above hurdle rates, CDL will pursue reinvestment, the spokesperson said in response to queries from BT. “In general, more mature strata-titled commercial assets in decentralised locations may present value-unlocking opportunities, depending on market conditions,” the spokesperson added. “Our approach is measured rather than programmatic. Capital recycling is not volume-driven, but value-driven.”

In 2025, CDL secured about S$2 billion in contracted divestments globally. These included the sale of Quayside Isle @ Sentosa Cove for S$97.3 million in a transaction completed in February 2026. The sale price was a 47 per cent premium to the property’s book value of S$66 million.

The transaction followed the end-2025 sale of a 50.1 per cent stake in South Beach, a mixed development, to IOI Properties Group for S$834.2 million. The deal, which valued the complex at about S$2.75 billion, partially lifted CDL’s FY2025 earnings to S$629.7 million.

CDL said: “If the expected returns from further capital expenditure are less compelling relative to alternative uses of capital, or if market conditions are favourable for value crystallisation, monetisation may be the preferred route.”

A major refresh

The group on Tuesday (Mar 10) launched City Square Mall, fresh from its AEI, works for which began in September 2023.

The mall now has 455,000 sq ft of net lettable area, with 98.7 per cent in committed occupancy as at end-2025.

The AEI was conducted in three phases, with the first two completed in the first half of 2025, and the final phase in the first quarter of 2026.

It partially lifted the revenue of CDL’s investment properties segment to S$513 million in FY2025, up from S$500 million in the preceding year.

CDL group chief executive Sherman Kwek, speaking at the launch of the mall, said: “Asset rejuvenation is a key pillar of our enhancement strategy to optimise operational performance and unlock value.”

The revitalised tenant mix comprises independent brands and new-to-market concepts; the mall has 21 unique offerings, including modern Australian-Asian fusion restaurant The Fat Sparrow, Japanese-inspired dessert cafe Daydream Desserts, and South Korean DIY photo studio, Photoism.

The extra 26,000 sq ft in GFA was gained through the Urban Redevelopment Authority’s Community and Sports Facilities Scheme.

Introduced in 2003, this scheme gives owners of “highly accessible commercial developments” to exceed their maximum permissible GFA by including space for community or sports uses.

In the case of City Square Mall, 15,210 sq ft across Level 4 and Basement 2 was set aside for Connect @ City Square Mall – a community space housing five social service agencies – Kampong Kapor Community Services, The Salvation Army and Singapore Children’s Society among them.

Divestments likely?

CDL’s Singapore properties are a core pillar of its commercial portfolio, anchored by assets such as City Square Mall and the 66-storey Republic Plaza in the Central Business District.

The CDL spokesperson said core assets are typically long-term holdings that generate resilient recurring income, are located in strong catchments or established business districts, and are properties where value can be driven through active asset management and enhancement.

Divestments may be on the cards for assets deemed mature, capital-intensive or where value has already been substantially crystallised, it said.

According to its website, CDL has 11 commercial properties in Singapore. Among these are Republic Plaza, Delfi Orchard and Palais Renaissance along the prime Orchard Road shopping belt, as well as Fortune Centre in Middle Road and Sunshine Plaza in Bencoolen.

In FY2024, CDL recorded S$600 million in total divestments globally. In Singapore, the property giant disposed of Cideco, which owns Cideco Industrial Complex, for a sale consideration of S$101.5 million.

It also divested 55 strata units in Citilink Warehouse Complex, 44 strata units in Cititech Industrial Building, 17 strata units in Fortune Centre and another 20 units in Sunshine Plaza.

CDL still holds a minority interest of around 30 to 40 per cent in the share value of Katong Shopping Centre, which in 2023 made a fourth attempt at an en bloc sale at S$638 million.

While the spokesperson said CDL is “open to value-unlocking options that are commercially viable and aligned with market conditions”, it noted that any collective sale process “ultimately depends on broader consensus among owners”.

In February 2026, owners of City Plaza, an 18-storey freehold, mixed-use project in Geylang, secured the 80 per cent mandate for a S$970 million en bloc bid. The complex was built in 1980 by CDL and was the company’s first mixed-development project. It has 450 units, comprising 384 strata retail units and 66 residential units; CDL owns about 16 of those retail units.

“Collective sales require a supportive market environment, feasible redevelopment economics and sufficient owner consensus. We will continue to monitor market dynamics and evaluate our options,” said the spokesperson.

“Across the commercial portfolio, CDL’s intent is to keep making improvements that support long-term competitiveness, including energy performance and operating efficiency.”

CDL is also undertaking a strategic review of its global portfolio and capital allocation priorities. It has identified its UK development legacy portfolio, comprising five properties with a total carrying value of about S$800 million as at end-2025, as a potential asset to be monetised.