"The focused execution of value-unlocking plans remains a key catalyst in narrowing its huge trading discount to RNAV. This is augmented by the recent strengthening of its Board and resilient Singapore market, where it has a dominant presence," says Natarajan, who is keeping his "buy" call and $11.20 target price.
According to Natarajan, key assets recently outlined for divestment by CDL include its legacy UK development platform, which is valued at around $800 million.
The company has plans to "value unlock" its global living sector portfolio, worth some $4 billion, via potential injection into a private fund, along with likely changes to its hospitality portfolio.
"While recent interest rate volatility could impact the execution timeline, a clearer articulation of asset light strategy and identification of core/non-core assets is a key rerating catalyst," says Natarajan.
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Last month, Kwek Leng Peck, who left the board back in 2020 following disagreements over the company's China strategy, recently rejoined the board at the elevated role of vice chairman.
Leng Peck is the cousin of CDL's executive chairman Kwek Leng Beng, and uncle of group CEO Sherman Kwek.
"We believe his reappointment will strengthen the Board’s rigour and lead to more robust deliberations over the group’s divestment and investment strategy, just as CDL embarks on value unlocking plans," says Natarajan.
Meanwhile, the analyst notes that the Singapore residential market remains healthy with CDL’s projects not impacted from recent policy changes targeting executive condominiums that will take effect only for upcoming land tenders.
CDL has two EC projects in the launch pipeline and Natarajan expects strong demand as buyers rush in before tighter policy restrictions.
Meanwhile, the high-end Newport Residences launched in January saw a stronger-than-expected take-up with around 80% of 246 units sold year to date at an average of $3,200 psf.
While FY2026 residential sales value is likely to be lower y-o-y, due to fewer launches, income contribution is expected to be on par from progressive revenue recognition of earlier sold projects, says Natarajan.
CDL shares closed at $8.44 on June 2, down 1.63% for the day and up 5.24% year to date.
