"Aided by strong Singapore residential market tailwinds and lower interest rates, we believe CDL is poised to deliver healthy shareholder returns in 2026," he adds.
Recent divestments by CDL were made at "healthy premiums" over book value. They include Quayside Isle @ Sentosa Cove, sold at 47% above book,
Hotel Osaka Shinsaibashi, sold at 65% premium over the 2023 acquisition price, as well as multi-family assets and two non-core hotels in the US.
In contrast to $2 billion fetched in 2025, CDL managed to divest only some $600 million in 2024, short of its then stated target of $1 billion.
See also: Broker's Digest: Raffles Medical Group, iFast, Lendlease REIT
Natarajan expects CDL to continue this divestment trend in 2026 with other non-core assets.
"These, in our view, include land plots and office assets in the UK," he suggests.
Another potential catalyst is spinning off its living sector portfolio across the UK, Australia and Japan – which has been performing well – into a private fund or REIT that can unlock significant capital, boost recurring income profile and enhance shareholder returns, he adds.
See also: ‘Solid’ Singapore property market affirms UOB Kay Hian’s confidence in PropNex
Meanwhile, CDL is set to continue to enjoy strong Singapore residential property sales momentum to continue, with a launch pipeline of more than 1,000 units.
Key launches include the Lakeside Drive residential property plot at Jurong, Newport residences, and two executive condominium sites in Woodlands and Senja Close.
In the first nine months of FY2025, CDL generated total residential sales value of $2.5 billion, an increase of 29% y-o-y. These sales will show up in its FY2026 and FY2027 earnings.
Natarajan expects CDL's global hospitality segment to perform "slightly better" this year, compared to FY2025.
With the divestments, CDL's net gearing, including fair value on investment properties, should fall steadily towards 65% levels on the back of the asset divestments.
CDL, says Natarajan, will also benefit from declining interest rates, with only 43% of its debts being on fixed rates as at 1HFY2025.
In all, Natarajan has raised his FY2025 to FY2027 earnings estimates by 3%, 10% and 7% respectively.
CDL shares closed at $8.02 on Jan 2, up 54.53% in the past 12 months.
