Its results briefing on Aug 14 revealed some new messages. CLI is likely to change its geographical exposure via capital rebalancing, change its capital structure and reach a point where its income from its fee income-related business (FRB) is able to offset its income from the real estate investment business (REIB) as the balance sheet lightens.
Although CapitaLand Investment’s (CLI) patmi dropped 6% y-o-y to $331 million in 1HFY2024 for the six months to end-June, and City Developments’ (CDL) surged by 32% to $87.8 million, the underlying fundamentals and metrics showed a different picture. CLI has a lower gearing and interest cover ratio versus CDL, and positive operating and free cash flow.
CLI has restructured into a real estate investment manager (REIM) and the journey to a Blackstone-like business model remains a work in progress. Andrew Lim, group COO of CLI, says the restructuring involves the three Cs: capital raising, capital recycling and capital rebalancing. Of the trio, capital raising and capital recycling have always been part of CapitaLand’s DNA.
