CapitaLand eyes $100b in assets by 2020

It says it will co-invest with capital partners, or manage assets without taking equity stakes

CapitaLand has unveiled ambitious plans to grow its total assets under management from $88.8 billion to around $100 billion by 2020.

It said yesterday that it can hit the target by co-investing with funds and capital partners, or managing the assets on behalf of funds or third-party owners without taking on equity stakes.

"$100 billion is a size we think is good and strong enough for CapitaLand to be fairly resilient and enjoy economies of scale," said president and group chief executive Lim Ming Yan.

"In terms of approach, we don't have to own 100 per cent of the properties. We are happy to own a certain percentage. With that, it actually frees up a lot of capital for us to consider new opportunities."

The group unlocked $2.6 billion through divestments and announced $5.7 billion of new investments in the 2017 financial year.

It recorded a net profit of $1.55 billion for the 12 months to Dec 31, an increase of 30.3 per cent, due to higher contributions from development projects in Singapore and newly acquired and opened shopping malls and serviced residences.

  • AT A GLANCE

    REVENUE:$4.61 billion (-12.2%)

    NET PROFIT:$1.55 billion (+30.3%)

    DIVIDENDS PER SHARE: 12 cents (+20%)

The rise in earnings was also due to higher portfolio and fair-value gains from the divestments of Innov Tower in China, One George Street and Wilkie Edge in Singapore, as well as serviced residence properties in Germany, China and Japan.

Net profit slipped 37.8 per cent to $267.7 million for the fourth quarter, mainly due to lower handover of units for development projects in China.

For the same reasons, full-year revenue fell 12.2 per cent to $4.6 billion.

Turnover for the fourth quarter dropped 35 per cent to $1.2 billion.

The firm announced a 20 per cent increase in core dividends for the year to 12 cents a share.

While the Singapore residential market has turned around, the group said it is also optimistic about China's residential market, and is looking to replenish its landbank there.

CapitaLand sold 407 units in Singapore worth $1.5 billion last year, and over 8,000 units worth 14.7 billion yuan (S$3.1 billion) in China. About 70 per cent of the value of units sold in China is expected to be recognised this year. In Vietnam, 44 per cent of the $718 million worth of units sold last year is expected to be booked this year.

Meanwhile, retail figures in China are also looking up, with the same-mall net property income growing at 8.6 per cent last year.

The company announced last month that it is offloading its stake in 20 Chinese malls for 8.37 billion yuan. It also, through associates and subsidiaries, sold its stakes in six malls in India and the property manager of these malls for $71.5 million in December.

A version of this article appeared in the print edition of The Straits Times on February 14, 2018, with the headline 'CapitaLand eyes $100b in assets by 2020'. Print Edition | Subscribe