“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 a 65% premium to the 2023 acquisition price; and multi-family assets and two non-core hotels in the US.
In contrast to the $2 billion raised in 2025, CDL divested only about $600 million in 2024, short of its then-stated target of $1 billion. 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.
Darren Chan of PhillipCapital has turned more bullish on the stock too, with an upgraded call from “accumulate” to “buy”, along with a higher target price of $9.62, from $8.34 previously, which is a narrower discount of 25% from CDL’s revalued net asset value (RNAV) of $12.82, from 35% previously.
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“We believe a narrower discount is justified by the improving real estate sector outlook, a declining interest rate environment, and continued progress in asset divestments,” states Chan in his Jan 5 note.
Similarly, Chan observes that CDL’s steady pace of asset monetisation is a clear indication of its focus on disciplined capital recycling and portfolio optimisation, which could help further narrow its discount to RNAV. Thanks to the divestment proceeds, Chan expects a special dividend to be declared when CDL reports its FY2025 results in February.
For RHB’s Natarajan, 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 to unlock significant capital, boost the recurring income profile, and enhance shareholder returns, he adds.
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Meanwhile, CDL is set to maintain strong Singapore residential property sales momentum, 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.
Elsewhere, 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 adjustments to investment properties, should fall steadily toward 65%. CDL, says Natarajan, will also benefit from declining interest rates, with only 43% of its debts being on fixed rates as at 1HFY2025.
Overall, Natarajan has raised his FY2025– FY2027 earnings estimates by 3%, 10% and 7%, respectively.
Mervin Song and Terence Khi of JP Morgan have become even more bullish on CDL recently, as they cheer the management’s focus on unlocking value and the prospects of a “strategic review”. In their Jan 6 note, they point out that CDL shares remain at an attractive 20% discount to its book value.
Based on the proceeds from last year’s divestments, Song and Khi estimate that CDL will declare a dividend of 23 cents per share, above consensus estimates of 17.3 cents.
Helped by stronger residential sales, they estimate that CDL will be back in the black with FY2025 earnings of $83.9 million and will double again to $200 million in FY2026.
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“With interest tailwinds and non-core asset sales, we expect a narrowing of the discount to CDL’s RNAV and CDL to trade to 1x book value,” state the analysts, who have estimated a FY2026 book value of $10.70 per share.
“We believe the desire to repair reputations and CDL’s share price should galvanize CDL to be more proactive in executing a monetisation and deleveraging plan,” add Song and Khi, referring to the high-profile boardroom fight that has been put behind. Based on an earlier target price of $8.20, they estimate that CDL is now worth $10.75.
HSBC’s Joy Wang notes that Singapore developers have been out of favour since the Global Financial Crisis, but this is set to change. “A healthier supply-demand balance and firmer pricing are supporting better development margins,” says Wang.
From her perspective, CDL, with its extensive commercial portfolio and landbank in Singapore, is well-positioned to capitalise on the next upcycle and deliver higher earnings over the coming few years.
“Meanwhile, dividends are emerging as a stronger feature of their stocks and some have even introduced a share buyback scheme,” says Wang, whose target price is $11.
