CDL undertakes review to relook strategy, optimise portfolio and capital recycling

[SINGAPORE] City Developments Ltd (CDL) is taking a hard look at its global portfolio and capital allocation priorities under a sweeping strategic review, with plans to step up capital recycling and monetise assets.

“To maximise shareholder returns, we are actively reviewing our growth strategy, portfolio structures and capital allocation priorities,” said group chief executive Sherman Kwek, at CDL’s earnings briefing on Friday (Feb 27). “We have taken decisive steps to unlock value from mature and non-core assets while selectively redeploying capital to drive growth.”

The property giant engaged a global advisory firm around September last year to conduct a review of its strategy and operations. CDL expects to announce the outcome of the review by June this year.

Key areas include rightsizing its portfolio and reviewing capital allocation priorities across geographies and asset classes, said Kwek, noting that formal targets will be provided once the review is completed.

Among assets under scrutiny is CDL’s UK development legacy portfolio, which comprises five properties with a total carrying value of about S$800 million as at end-December 2025, after two assets were sold over the last two years.

UK development platform

Acknowledging that the UK assets have “underperformed”, Kwek said that the group is looking to “recycle this capital as quickly as possible” and hopes to do so by the end of the year. CDL entered into the UK before Kwek assumed the CEO role, and had to engage an external manager then as it had no presence there.

Currently, CDL’s five properties in the platform are a carpark at 28 Pavilion Road, Knightsbridge, acquired in 2013; Stag Brewery at Mortlake, bought in 2015; office building Development House acquired in 2016; residential project Teddington Riverside bought in 2015; and the six-unit Chesham Street in Belgravia.

As at end-December 2025, 148 of the 224 units in Teddington Riverside and three of the six units at Chesham Street remain unsold. CDL is exploring options including bulk sales for Teddington Riverside, noted Kwek.

For its China commercial properties, Kwek said that the market remains challenging, and added that the group will take a pragmatic approach, assessing each asset individually and even accepting “some haircuts on it”, where necessary, to unlock capital. “We have to continue to drive forward with our capital recycling – it is not a one-off exercise. Capital recycling is very much a part of our business as property developer and asset manager.”

In 2025, CDL secured around S$2 billion in contracted divestments globally, outpacing around S$1.7 billion of acquisitions, which included three Singapore government land sales sites for about S$1.2 billion, and the Holiday Inn London – Kensington High Street hotel for £280 million (about S$480.2 million).

The contracted divestments included the sale of Quayside Isle @ Sentosa Cove for S$97.3 million, which was completed in February 2026.

CDL on Friday posted a net profit of S$538.5 million for the second-half ended Dec 31, 2025, rising more than four times from S$113.5 million in the year-ago period. This more than trebled the group’s full-year earnings to S$629.7 million, from S$201.3 million in FY2024.

Robust growth

Bottom line growth was primarily driven by robust Singapore home sales and strong capital recycling gains, notably from the sale of a 50.1 per cent stake in the South Beach mixed-use development to Malaysian partner IOI Properties Group for S$834 million. The deal generated a gain of S$473.1 million.

As at Feb 25, 2026, CDL has sold 95 per cent of the 777-unit The Orie condo project in Toa Payoh. It also sold 87 per cent of the 706-unit Zyon Grand project, as well as 66 per cent of its 246-unit Newport Residences development.

Including executive condos, the group sold 1,657 units for FY2025, raking in total sales value of S$4.35 billion – marking the highest sales value in CDL’s history. In FY2024, the group sold 1,489 units with total sales value of S$2.97 billion.

CDL said that it is confident in the Singapore residential market for 2026, supported by stable demand in public and private housing. With moderating interest rates, buying interest is likely to remain resilient.

The group is preparing to launch its Lakeside Drive project in the third quarter of 2026 – featuring five 17-storey residential towers with 570 units and commercial space on the first storey. CDL clinched the site in June 2025 at S$608 million or S$1,132.08 per square foot per plot ratio (psf ppr).

It also plans to launch projects on the Woodlands Drive 17 and Senja Close EC sites in the first quarter of 2027. In August 2025, the residential heavyweight bid S$360.9 million or S$782 psf ppr for the Woodlands site, and S$252.9 million or S$771 psf ppr for the other plot.

On the commercial front, Kwek said that the group has considered amalgamating Delfi with neighbouring Claymore Connect and Orchard Hotel to create a sizeable mixed-use development.

While CDL has taken some steps under the Strategic Development Incentive scheme, Kwek noted the project will not start in the near term to avoid putting financial strain on the group.

“Looking ahead, the group enters its next phase of growth with renewed vigour. As we embark on our value-creation journey, we are well positioned to deliver sustainable growth and maximise returns for all shareholders,” Kwek added.

Shares of CDL ended Friday 4.9 per cent or S$0.46 higher at S$9.82, after the release of the results.