Citing the quicker pace of asset monetisation which reached some $2 billion in 20205, Vijay Natarajan of RHB Bank Singapore has become more optimistic on City Developments, raising his target price to $9.50 from $8.50.

 

" This, we believe, is the right strategy that addresses market concerns of high debt load and sub-par ROE," states Natarajan in his Jan 5 note.

 

" Aided by strong Singapore residential market tailwinds and lower interest rates, we believe CDL is poised to deliver healthy shareholder returns in 2026," he adds.

 

Recent divestments by CDL were made at " healthy premiums" over book value. They include Quayside Isle @ Sentosa Cove, sold at 47% above book,

 

Hotel Osaka Shinsaibashi, sold at 65% premium over the 2023 acquisition price, as well as multi-family assets and two non-core hotels in the US.

 

In contrast to $2 billion fetched in 2025, CDL managed to divest only some $600 million in 2024, short of its then stated target of $1 billion.

 

Natarajan expects CDL to continue this divestment trend in 2026 with other non-core assets.

 

" These, in our view, include land plots and office assets in the UK," he suggests.

 

Another potential catalyst is spinning off its living sector portfolio across the UK, Australia and Japan &ndash which has been performing well &ndash into a private fund or REIT that can unlock significant capital, boost recurring income profile and enhance shareholder returns, he adds.

 

Meanwhile, CDL is set to continue to enjoy strong Singapore residential property sales momentum to continue, with a launch pipeline of more than 1,000 units.

 

Key launches include the Lakeside Drive residential property plot at Jurong, Newport residences, and two executive condominium sites in Woodlands and Senja Close.

 

In the first nine months of FY2025, CDL generated total residential sales value of $2.5 billion, an increase of 29% y-o-y. These sales will show up in its FY2026 and FY2027 earnings.

 

Natarajan expects CDL' s global hospitality segment to perform " slightly better" this year, compared to FY2025.

 

With the divestments, CDL' s net gearing, including fair value on investment properties, should fall steadily towards 65% levels on the back of the asset divestments.

 

CDL, says Natarajan, will also benefit from declining interest rates, with only 43% of its debts being on fixed rates as at 1HFY2025.

 

In all, Natarajan has raised his FY2025 to FY2027 earnings estimates by 3%, 10% and 7% respectively.

The buyer is understood to be an entity owned by Patrick Kho

 

[SINGAPORE] City Developments Ltd (CDL) is understood to have entered into a deal to sell its Quayside Isle @ Sentosa Cove property for S$97.3 million, reflecting S$2,205 per square foot on a net lettable area of 44,121 square feet (sq ft).

 

The two-storey waterfront lifestyle mall is on an 89,683 sq ft site with about 80 years&rsquo balance lease. The site is zoned commercial under the Urban Redevelopment Authority&rsquo s Master Plan 2025.

 

The buyer is understood to be an entity owned by Patrick Kho, the former group managing director of Lian Huat Group.

 

Quayside Isle was completed by   CDL   : C09 +0.27% in 2012 alongside the W Singapore &ndash Sentosa Cove hotel and The Residences at W Singapore Sentosa Cove. In 2020, the group completed the sale of W Singapore &ndash Sentosa Cove to   CDL Hospitality Trusts   : J85 -0.6%.

 

CDL&rsquo s sale of Quayside Isle, which is expected to be completed next year, is in line with the group&rsquo s capital recycling and portfolio optimisation efforts.

 

In early December, CDL announced that it had secured about S$1.9 billion in contracted divestments in the year to date, strengthening its capital position and optimising its portfolio.

 

These divestments include the Bespoke Hotel Osaka Shinsaibashi in Japan a 250-unit multifamily asset in Sunnyvale, California, in the US and in Singapore, the Piccadilly Galleria and a 50.1 per cent stake in the South Beach project&rsquo s commercial components (comprising offices, retail space and JW Marriott Hotel Singapore South Beach). 

 

Kho previously held a stake in Lian Huat Group&rsquo s parent, Lian Keng Enterprises (LKE). However, a family feud resulted in his stepbrother Kho Choon Keng, also known as CK Kho, applying to have LKE wound up. 

 

In July 2024, the High Court issued an order for LKE to be wound up, but granted a 30-day stay to allow the shareholders to reach a settlement.

 

Under the settlement, CK Kho bought out the shares of Patrick Kho, his sister Patricia Kho, and their mother, Saw Gek Hua.

 

Thus, CK Kho became the sole owner of LKE in March this year.

 

CDL appointed Knight Frank and CBRE for the sale of Quayside Isle the two property consulting groups announced an expression of interest exercise in September. 

 

At the time, the property was more than 90 per cent leased. Notable tenants there include Common Man Coffee Roasters, Greenwood Fish Market, Jasons Deli and Quayside Isle Preparatory School.

 

In their release in September, Knight Frank and CBRE also highlighted three &ldquo resilient catchment streams&rdquo for Quayside Isle: stable daily patronage from the affluent residents in Sentosa Cove, a steady inflow of local and international visitors to Sentosa, and event-driven visitation from world-class events such as the Singapore Yacht Show at ONE° 15 Marina, international regattas, as well as golf tournaments at Sentosa Golf Club. 

The hotel has high occupancy rates of more than 97% for the nine months ended September

 

[SINGAPORE] A wholly owned subsidiary of City Developments Limited (CDL) &ndash Copthorne Hotel Holdings &ndash has completed the acquisition of Holiday Inn London on Kensington High Street for £ 280 million (S$480.2 million). 

 

The hotel has 706 rooms, with the sale executed at £ 396,600 per room, said CDL in a statement on Tuesday (Dec 2). 

 

The building is freehold and stands at 6,356 square metres. It is located a two-minute walk away from Kensington High Street, which is near various cultural landmarks such as Hyde Park, Kensington Palace and Royal Albert Hall. 

 

The property is also a 15-minute walk from exhibition centre Olympia London.

 

CDL said that the hotel has maintained &ldquo robust performance&rdquo , with high occupancy rates of more than 97 per cent for the nine months ended September. 

 

&ldquo Total revenue for the preceding 12 months exceeded £ 39 million, and the hotel is expected to generate a running yield of over 6 per cent,&rdquo the statement noted. 

 

Kwek Leng Beng, executive chairman of CDL, said the acquisition is a &ldquo once-in-a-lifetime chance&rdquo to secure an ultra-prime freehold site in Central London. 

 

&ldquo Freehold sites in this location are exceptionally scarce, and it is even rarer to find one directly adjacent to our Copthorne Tara hotel,&rdquo he added. 

 

The group will own two of the largest freehold sites in Kensington and Chelsea in London, following the deal. 

 

With this acquisition, CDL has expanded its Central London portfolio to over 3,000 hotel rooms. 

 

The properties include The Biltmore Mayfair, Millennium Gloucester Hotel London and the Copthorne Tara Hotel London Kensington. 

The proposed divestment aligns with the real estate company&rsquo s capital recycling and portfolio optimisation efforts

 

[SINGAPORE]   City Developments Limited (CDL)   : C09 +0.14% is proposing to divest a hotel in Osaka, Japan, to real estate funds managed by Blackstone for 14 billion yen (around S$117 million). 

 

On Tuesday (Nov 25), CDL said that its wholly owned subsidiary M& C Sakura TMK has inked a purchase and sale agreement with the potential buyers to divest the Bespoke Hotel Osaka Shinsaibashi. 

 

Set to be completed in December, the proposed divestment marks the group&rsquo s fourth major capital recycling transaction in 2025. It follows CDL&rsquo s sale of its stake in the South Beach development as well as the sales of Piccadilly Galleria and its multi-family asset in Sunnyvale, California, and brings the group&rsquo s total contracted divestments in the year to date to more than S$1.8 billion.  

 

CDL said that the divestment aligns with its strategy to &ldquo unlock value and redeploy capital towards opportunities that enhance growth, strengthen the balance sheet and deliver sustainable shareholder returns&rdquo . 

 

Daisuke Kitta, Blackstone&rsquo s head of real estate for Japan, said that the proposed deal will strengthen the investment firm&rsquo s footprint in Japan through the addition of a prime asset to its real estate portfolio. 

 

Noting that the deal stands at the &ldquo intersection of two of Blackstone&rsquo s high conviction investment themes &ndash the hospitality and leisure sector, and Japan&rdquo , Kitta added that Blackstone intends to identify new opportunities and partner with companies to deepen its   hospitality presence in Japan.

 

Opened in 2019, Bespoke Hotel Osaka Shinsaibashi is a 256-room freehold lifestyle hotel located in Osaka&rsquo s Shinsaibashi commercial district. It is a five-minute walk from Midosuji Avenue, a street that is known for major international luxury brands and department stores. 

 

With a land area of 938 square metres (sq m) and a gross floor area of 5,585 sq m, it is close to the famed Shinsaibashi-suji shopping street and is a four-minute and six-minute walk from Nagahoribashi and Shinsabashi stations, respectively. 

 

CDL acquired the hotel for 8.5 billion yen in August 2023, less than a year after Japan reopened its borders to visa-free international travel in October 2022. 

 

&ldquo The hotel benefited from the positive market recovery momentum amid robust demand from international visitors, further augmented by the successful World Expo 2025 Osaka Kansai, which has recently concluded,&rdquo CDL said. 

 

Kwek Eik Sheng, CDL&rsquo s group chief operating officer, remarked that the divestment is &ldquo well-timed&rdquo as it &ldquo (takes) advantage of Japan&rsquo s strong hospitality demand&rdquo .