CapitaLand Investment (CLI) in its latest 3QFY2022 ended September business update announced that it has seen operational resilience across all three of its growth drivers – fund management, lodging management and capital management.
Under its fund management segment, funds under management (FUM) stood at $86 billion year-to-date (ytd) as at end September. As at Nov 3, embedded FUM comprised of $3.4 billion estimated FUM from committed and undeployed capital for private funds and announced REITs transactions which are not completed and yet to be included in FUM as of 3QFY2022, and $2.7 billion from announced transactions post 3QFY2022.
The group’s total transacted value total gross value of investments and divestments), excluding transactions of undisclosed values due to confidentiality clauses, stood at $6.6 billion as at Nov 3. Ytd, fund management fee-related earnings (FM FRE) grew 16% y-o-y to $339 million. This brings 9MFY2022 FM FRE/FUM to 53 basis points (bps), 3 bps higher than 50 bps in FY2021.
As for the lodging management segment, revenue per average unit (RevPAU) came in at $110 for the 3QFY022 period, higher than the $77 in the same period a year ago. Occupancy also increased y-o-y to 73% from 62%.
For the 9MFY2022 period, the group recorded 26,000 new units signed, while it opened 7,300 units. Total portfolio units stood at 155,00, representing 97% of 2023’s target of 160,000 units. This brings the lodging management fee-related earnings (LM FRE) to $190 million for the 9MFY2022 period, some 48% higher y-o-y.
On the other hand, the capital management segment saw $2.4 billion worth of capital being recycled as at Nov 3. Group cash and undrawn facilities of CLI’s treasury vehicles came in at $7.2 billion. Share buyback as at Nov 3 stood at $133 million, representing 0.68% of issued shares and another 4.32% of buyback capacity remaining, excluding treasury shares as at the date of the share buy-back resolution (Apr 29).
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The group has also posted fiscal discipline and resilience during the 3QFY2022 period. “Healthy cash balance, available undrawn facilities and robust credit profile positions us well to weather future economic headwinds and capitalise on opportunities,” says the group in its business update.
During the period, it saw a strong capacity of cash and bank lines of $7.2 billion in group cash and undrawn facilities of CLI’s treasury vehicles; a healthy gearing of 0.49x net debt/equity and 0.3 times net debt/ total assets; robust credit profile of 4.2x interest coverage ratio, 3.3x interest service ration and $440 million in operating cashflow; it also experienced a disciplined financial management as it posted 2.9% implied interest cost, 62% fixed debt rate, 2.9 years average debt maturity and $4.0 billion in sustainability financing.
On the outlook, the group notes that global economic uncertainty continues to impact financial and property markets worldwide. With inflation remaining high in many markets, numerous central banks continue to raise interest rates seeking to bring it under control. Additionally, ongoing global geopolitical tensions are adding greater instability and ambiguity to the economic outlook.
“Given the macroeconomic headwinds and market volatility, CLI continues to exercise patience and prudence in its investments and new business development. At the same time, we continue to ensure that CLI has a strong balance sheet to capture opportunities that may arise in this rapidly changing market,” the group says in its business update.
It adds: “CLI’s business is anchored by a high-quality global real estate portfolio that generates healthy recurring rentals, as well as fund and lodging management platforms that produce stable fee income. We remain focused on creating value in our properties through asset enhancements and redevelopment and will continue to build our fee-related income from fund management and lodging.”
As at Nov 3, shares in CLI closed 1.3% lower at $3.04.
Photo: CapitaLand
