CDL flags ‘significantly weaker’ performance for H2 2026

Certain capital-recycling divestments have not come to fruition, resulting in potential impairment losses for City Developments Ltd (CDL). The company, under the control of Kwek family, expects a "significantly weaker" financial performance for the second half of 2026, contrasting with the strong performance of the previous half-year that saw a capital-recycling gain of S$473.1 million from the South Beach Consortium deal.

This decline is attributed to unfavourable foreign exchange movements, particularly the strengthening of the Korean won against the Singapore dollar since July. Additionally, CDL is evaluating its property portfolio, which might lead to impairment losses. As of September 30, China office portfolio continues to face market challenges.

The company announced a plan to pursue S$6 billion in divestments by FY2029 and aims to reduce its net gearing from 75% to 55% by FY2029, a reduction of 20 percentage points. At the end of September, CDL was looking to achieve a gearing of 55 percent, but it currently stands at 75 percent. The group is actively seeking divestment opportunities and optimisation in line with its capital-recycling priorities.

CDL reported a higher sales volume in Q3, selling 124 units totaling S$322.6 million compared to 88 units worth S$313.2 million a year earlier. The company's Singapore office portfolio has a committed occupancy of 97.4 percent, maintaining positive rental reversions for three quarters in 2026. CDL is optimistic about leasing activities given an anticipated supply crunch.

The global operating environment remains challenging, with heightened geopolitical uncertainties, financial market volatility, and evolving macroeconomic conditions.