Capital recycling is the key focus over at City Developments (CDL). As part of a “GET” strategy launched in 2018 by the property developer and investor, CDL is aiming for “growth, enhancement and transformation” — strengthening its balance sheet, unlocking the potential of its portfolio and redeploying capital into higher-yielding opportunities to enhance shareholder returns.

CDL’s GET strategy has reaped a big harvest; year to date, the group has divested over $1.5 billion worth of assets, including its 50.1% stake in South Beach, which nets the company a gain of $465 million. 

Announced in June, CDL’s sale of its joint stake in the hotel, office and retail components of South Beach was based on a $2.75 billion valuation, which represents an approximately 3% premium over its last valuation in end-2024. Completed in September, the sale marked one of CDL’s largest divestments.

In contrast, the company had spent just $1.2 billion on Government Land Sales sites to replenish its local land bank and other investments between January and August this year. 

“Amid ongoing macroeconomic uncertainty, the group has taken a prudent stance on new investments while accelerating capital recycling,” says CDL group CEO Sherman Kwek. “To date, we have secured over $1.5 billion in contracted divestments, with more coming in the pipeline. These efforts aim to strengthen our capital position and optimise our portfolio.”

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The South Beach divestment follows smaller transactions in Singapore, including the completed sale of City Industrial Building, a strata-titled car park with 82 lots at The Venue Shoppes in Potong Pasir and several strata commercial units at Fortune Centre.

CDL has also secured a buyer for the ground-floor retail podium Piccadilly Galleria, which is part of the group’s Piccadilly Grand joint venture development at Farrer Park.

In the US, the group completed the divestment of Millennium Hotel St. Louis in July and has contracted the sale of another US hotel asset, Comfort Inn Near Vail Beaver Creek. 

Some of these transactions were first announced in 2024, and CDL divested assets worth more than $600 million last year as part of its capital recycling moves. At the end of last year, however, the group had fallen short of its $1 billion target — announced in early 2024. 

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With the completion of the South Beach divestment, CDL appears to be back on track; with all other contracted divestments expected to be completed in 2H2025.

CDL has divested over $1.5 billion worth of assets, including its 50.1% stake in South Beach, which nets the
company a gain of $465 million

 

“2024 has been a year of formidable headwinds, with macroeconomic pressures and sector-specific challenges weighing on the group’s near-term earnings and portfolio calibration plans,” says Kwek. “Despite all this, the group remains resilient, exercising financial prudence while maintaining flexibility, with the aim of maximising shareholder value. Focused on our GET strategy as our roadmap, our key priorities include strengthening our financial position by accelerating capital recycling, unlocking portfolio value through strategic initiatives, pursuing attractive acquisitions in a disciplined manner and future-proofing our business.” 

CDL’s financials show a 3.9% y-o-y growth in patmi for 1HFY2025. However, the group was adversely affected by unrealised net foreign exchange losses of $63.1 million during the period. Excluding these exchange effects, the group’s patmi would have jumped 322.7% y-o-y to $154.3 million in 1HFY2025. 

Over the medium term, CDL intends to reduce net gearing, including fair value gains, from 70% to between the high 50s to low 60s.

“Despite some instability in the earlier part of the year due to internal issues, the ensuing period has been marked by stabilisation, renewed alignment and disciplined execution,” says Kwek. “Looking ahead, while the operating environment remains fluid, the easing of interest rates offers further upside as we continue to pursue our capital recycling and fund management initiatives.”

For exhibiting strength in its financials and returns to shareholders, CDL has picked up three awards at The Edge Singapore’s Billion Dollar Club Awards 2025. CDL is awarded for the highest growth in profit after tax over three years, the highest weighted return on equity over three years and overall sector winner in the real estate category. 

30 years of sustainability

Under the leadership of its late deputy chairman Kwek Leng Joo, who spearheaded CDL’s sustainability strategy since 1995, CDL has made strides in its sustainability efforts over the years. 

2025 marks the eighteenth year since chief sustainability officer Esther An and her team launched CDL’s first sustainability report, which was also the first by a Singapore-listed company. Once an appendix to the annual report, it has become a focus in its own right, with the sustainability board statement being a key chapter in the company’s annual report today. 

CDL’s Integrated Sustainability Report 2025, released in April, builds on last year’s focus on nature and biodiversity. CDL is one of only nine Singapore companies that have pledged to disclose their material nature-related issues to stakeholders in line with the Taskforce on Nature-related Financial Disclosures’ (TNFD) recommendations.

In fact, CDL was the first company in Singapore to publish TNFD-aligned disclosures with its previous sustainability report, released in March 2024. Starting from business operations that are wholly owned and directly managed by CDL’s headquarters in Singapore, CDL has expanded its TNFD disclosures this year to include its wholly and majority-owned hotels under its operational control in New Zealand.

CDL is not only an early adopter of the TNFD recommendations, but sustainability chief An sits on the 40-strong global Taskforce itself as the only Singaporean representative. 

“Guided by our ethos of ‘Conserving as We Construct’, CDL has consistently integrated environmental stewardship, social well-being and economic prosperity into our operations,” says An. “We continue to innovate by ‘cooling by greening’ and collaborate with our ecosystem of partners to step up on nature-based solutions and TNFD reporting. This milestone underscores our dedication to creating sustainable spaces that respect nature [and] advance communities, and ensures a resilient future for all.”

In line with its net-zero commitments, CDL has reduced its Scope 1 and 2 operational carbon emissions for assets under direct management and operational control by 25% from 2016 levels.

It also achieved a 38% reduction in Scope 3 embodied carbon in new developments compared with a 2016 baseline. 

The group also recorded a 52.1% reduction in Scope 3 investment intensity, reflecting CDL’s commitment to achieving its Science Based Targets initiative (SBTi)-validated targets to reduce Scope 1 and 2 carbon emissions intensity by 63% and reduce Scope 3 GHG emissions intensity from purchased goods and services by 41% and from investments by 58.8% by 2030, from a baseline year of 2016. 

To further advance its climate action strategy, CDL completed an Internal Carbon Pricing pilot study on Republic Plaza, its flagship Grade-A office building in Singapore, laying the foundation for future implementations of carbon pricing mechanisms across its portfolio.

CDL continues to advance nature and biodiversity conservation through the launch of two key initiatives in March: the CDL EcoTrain and CDL MicroForest — both located at City Square Mall. “These initiatives align with CDL’s TNFD adoption and reinforce its commitment to enhancing urban biodiversity and climate resilience while nurturing future eco-champions and promoting sustainable living,” says An. 

A decommissioned SMRT train cabin has been repurposed into a zero-energy CDL EcoTrain. The cabin is designed with colours and messages inspired by the 17 United Nations Sustainable Development Goals

Sustainable financing

CDL has secured over $10 billion in sustainable financing since 2017. In 2024, it obtained a landmark $400 million sustainability-linked loan (SLL) from DBS Bank, aimed at supporting nature conservation and sustainable development in Singapore. 

With a five-year term, the first-of-its-kind loan is tied to the TNFD-aligned targets, reinforcing CDL’s leadership in sustainable finance and environmental stewardship.

According to CDL, the sustainability performance targets (SPTs) of the SLL are tied to targets on nature and biodiversity conservation, nature- and climate-related advocacy and education, as well as operational targets, such as waste management.

If CDL achieves certain SPTs by a pre-agreed deadline, the developer should enjoy lower interest on its loan.

The scope of the SPTs can cover multiple projects by CDL; some of these targets include using only native and/or non-invasive species at its new development sites, conducting biodiversity impact assessments at new development sites in or near sensitive areas, and waste intensity reduction targets, among others.

Yiong Yim Ming, group CFO of CDL, says robust sustainability reporting can channel capital to “expedite” green building and climate action. “We aim to enhance our triple bottom line through sustainable development, achieve our net-zero ambitions and align finance with sustainability performance through innovative capital management initiatives.”