During the quarter, CDL sold 795 units in Singapore, 85% higher y-o-y, mainly thanks to the launch of The Orie in Toa Payoh, the group’s joint venture (JV) project. About 86% or 668 of the development’s 777 units were sold on its launch weekend with an average selling price of $2,704 per square foot. The group’s other launched projects also continued to post good sales, leading to a total sales revenue of $1.9 billion, 155% higher y-o-y.
In 1QFY2025, the group’s hotel operations reported a RevPAR of $139.70, 1.2% higher y-o-y, thanks to higher room occupancy and higher average room rates in Australasia and the rest of the UK and Europe.
CDL’s committed occupancy for its office portfolio in Singapore fell by 0.5 percentage points q-o-q to 97.2% due to South Beach and Republic Plaza, which saw lower occupancies of 92.4% and 97.7%. The group’s committed occupancy rate for its retail portfolio also fell by 1.8 percentage points q-o-q to 96.2% mainly due to Quayside Isle, which fell to 91.9%.
In its release, CDL said the group will remain focused on recycling capital for FY2025, and has lined up “significant divestments” to reduce its gearing. To this, Lee believes these divestments are likely to be CDL’s non-core, strata-titled units from its retail, office and industrial properties in Singapore, as well as selected hotels globally. The former Stag Brewery site may also be up for divestments, given that it has now attained planning approval which could “better facilitate” a sale, says Lee.
See also: RHB raises FY2026 DPS forecast on CSE Global, maintains ‘buy’ call and TP of 63 cents
The analyst has kept his target price of $9.51. Due to the lack of financial disclosures during the update, he expects to see limited share price impact following the announcement.
PhillipCapital analyst Darren Chan has also kept his target price of $6.02 as he also likes the strong property development sales and higher portfolio RevPAR during the quarter. While Chan expects CDL’s hotel RevPAR to see low- to mid-single digit growth in FY2025, the group’s elevated net gearing remains a concern.
Like their peers, the research team at OCBC Investment Research also highlighted CDL’s “robust uplift” in its Singapore residential sales during the quarter and resilient operating metrics for its investment properties in the city-state.
See also: Frencken lowers 1HFY2025 revenue outlook, analysts raise TPs on semicon upswing
The team also notes that the group has been proactive in reconstituting its portfolio, including divestments and redeveloping some of its older properties, to unlock value for shareholders.
Despite the positives, the team feels that the uncertain global economic outlook and impact of policy tightening may dampen investor sentiment.
Furthermore, investors may be watching CDL’s moves, mainly its execution of its strategies and future corporate governance practices, following the recent board disagreement.
OIR has a slightly lower target price of $6.01, down from $6.02 previously.
CGSI analyst, Lock Mun Yee, who kept her target price of $8.97, remains positive on CDL as she sees the group’s downside risk to be limited. This is given its current stock valuation of 0.49 times its FY2024 P/B.
Shares in CDL closed 3 cents lower or 0.63% down at $4.76 on May 22.
