City Developments Limited Projects Weaker H2 2026 Performance Amid Market Challenges

SINGAPORE – City Developments Limited (CDL) has flagged an anticipated "significantly weaker" financial performance for the second half of 2026, attributing this outlook to adverse foreign exchange movements and delays in capital-recycling initiatives. The company, controlled by the Kwek family, revealed this in its third-quarter business update on November 11.

CDL noted that certain capital-recycling deals, which were expected to materialise in the current financial year, are now projected to be completed in FY2027. This situation contrasts sharply with the second half of 2025, during which the company reported a substantial capital-recycling gain of S$473.1 million (approximately $351 million) from the divestment of South Beach Consortium.

The company indicated that the anticipated weaker performance is further compounded by the appreciation of the Korean won against the Singapore dollar since July, which has impacted its financial results. Additionally, CDL is currently valuing its property portfolio, a process that may lead to impairment losses, particularly affecting its operations in China, which continue to face significant market challenges.

As part of its strategic review, CDL has unveiled a plan focused on capital recycling and deleveraging, aiming for S$6 billion (around $4.4 billion) in divestments by FY2029. This strategy is intended to recycle capital from mature, non-core, or underperforming assets, with a target gearing ratio of 55% by FY2029, down from 75% as of September 30, 2026. The high gearing ratio is largely due to recent acquisitions of two government land sale sites in Singapore, costing S$542.4 million (approximately $400 million) and S$709 million (about $525 million) respectively.

CDL reported a healthy liquidity position, with cash reserves of S$2.1 billion (around $1.55 billion) and available committed credit facilities amounting to S$4.8 billion (approximately $3.5 billion). The company stated that there are no material concerns regarding its ability to meet near-term debt obligations, with an interest cover ratio of 2.7 times.

“The global operating environment remains challenging, characterised by heightened geopolitical uncertainties, financial market volatility and evolving macroeconomic conditions.”City Developments Limited

In the third quarter, CDL and its joint-venture associates sold 124 residential units in Singapore, generating a total sales value of S$322.6 million (approximately $238 million), compared to 88 units worth S$313.2 million a year earlier. Sales during this period were primarily driven by existing projects such as Norwood Grand and The Myst, both of which have achieved high occupancy rates of 96% and 99%, respectively.

Looking ahead, CDL anticipates a supportive backdrop for leasing activities due to an expected supply crunch in the office market, with two new Grade A developments, Newport Tower and Union Square Central, on track for completion in 2027 and 2028. The company’s retail assets also reported a committed occupancy rate of 97.1%, with Palais Renaissance achieving full occupancy.

Despite the challenges, CDL's global hotel operations reported an increase in revenue per available room, up 6.4% to S$175.20 (approximately $129) for the first nine months of FY2026, compared to S$164.60 (around $122) the previous year. This growth was observed across various regions, including Australasia (11.8%), Singapore (3%), Europe (4.7%), and New York (8.9%).

CDL acknowledged the challenging global operating environment, characterized by geopolitical uncertainties and financial market volatility. The company remains focused on sustaining operational momentum across its core businesses while navigating these headwinds.

Following the announcement, CDL's shares closed 1.2% lower at S$7.12 (approximately $5.25) on November 11.