SINGAPORE – CapitaLand Investment (CLI) on Thursday posted a 33.8 per cent drop in net profit to $428 million for the six months ended Dec 31, 2022, compared with $647 million the year before.

The real estate investment manager reported lower gains from the revaluation of investment properties and asset recycling, it said in the release of its financial results.

The results translate to earnings per share (EPS) of 8.3 cents, against 15.3 cents the year before.

Revenue was up 22.3 per cent to $1.5 billion, from $1.2 billion a year earlier, on strong operating performance from CLI’s lodging properties as international travel recovers.

There were also contributions from a newly acquired data centre in China, student accommodation and rental housing properties in the United States and Japan, and higher fee revenue from the group’s lodging management business.

The gains were partially offset by the absence of contributions from properties divested in Japan in 2021, and in Singapore in the first half of 2022.

The Singapore and China markets accounted for 33 per cent of the group’s total revenue, compared with 43 per cent in the same period a year ago. CLI noted that there was an increase in revenue contribution from other developed markets during the second-half period, which represented 56 per cent of total revenue.

For the full year, CLI’s board proposed a core dividend of 12 cents per share and a special dividend-in-specie of 0.057 CapitaLand Ascott Trust units per share – valued at 5.9 cents apiece. This brings the total dividend for the year to 17.9 cents.

For FY2022, net profit was down 36.2 per cent to $861 million, compared with $1.3 billion in the previous year, translating to an earnings per share of 16.8 cents from 3.83 cents.

Revenue was up 25.4 per cent to $2.9 billion from $2.3 billion, buoyed by higher contributions from the group’s fee income-related businesses and real estate investment business.

Fee income-related business revenue grew 6 per cent year on year to $955 million, due to higher fee-related earnings from private funds and lodging management. Real estate investment business revenue was up 40 per cent year on year to $2.1 billion, as occupancy and room rates for lodging properties improved.

CLI group chief executive Lee Chee Koon said the FY2022 results were impacted by rising interest rates and China’s zero-Covid approach. This led to lower capital recycling activities and higher rental rebate to support China tenants.

“With the return of our ability to recycle capital in China as the country overcomes the worst of its Covid-19 situation, our underlying business is showing encouraging signs of recovery, and we stand ready to act on the right opportunities as we pursue long-term growth sustainably,” he said.

CLI’s funds under management stood at $88 billion as at end-2022, supported by acquisition-led growth of the group’s listed funds and the launch of eight new private funds.

Separately, the group said it has committed $1.1 billion in equity for a new programme to invest in “special situation opportunities” in China. It had obtained $892 million from global institutional investors for the programme. These investors hold an 80 per cent stake in the programme, while CLI holds the remaining 20 per cent.

The new CapitaLand China Opportunistic Partners (CCOP) Programme comprises a $291 million single-asset fund and an $824 million programmatic joint venture (JV), CLI said.

The single-asset fund has acquired an integrated development with office and retail components in China for 2.81 billion yuan (S$553 million). The property, Beijing Suning Life Plaza, is located in Beijing’s central business district.

The 19-storey development will undergo an asset repositioning in the first quarter of 2023. It now has a net lettable area (NLA) of 52,600 square metres (sq m) comprising 24,200 sq m of office space and 28,400 sq m of retail space. The amount of office space will increase to 55,000 sq m; 6,500 sq m of ancillary retail space will be retained in the basement and first levels.

The programmatic JV has acquired a logistics development in Foshan, Guangdong, for 799 million yuan. The property, which will complete construction in Q3 2023, is fully pre-leased to a domestic textile e-trading platform for 15 years. It also has an NLA of 140,355 sq m.

CLI closed at $3.79, down 6 cents or 1.56 per cent, on Thursday. THE BUSINESS TIMES