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CapitaLand Investment Posts 8% Growth in Fee-Income Related Revenue
Singapore, 14 August 2024 – CapitaLand Investment Limited (CLI) announced that its Fee-income Related Business (FRB) continued to strengthen for 1H 2024, driven by the Private Funds, Lodging and Commercial Management businesses. CLI’s fee-income related revenue grew by 8% year-on-year, and FRB’s contribution to Operating PATMI grew to 63%, up from 49% in the same period last year. The Group also made significant progress in its asset-light transition and diversification strategy, unlocking capital recycling of S$1.7 billion to be redeployed for growth.
CLI registered a total PATMI of S$331 million and Operating PATMI of S$296 million for 1H 2024. Portfolio gains stood at S$35 million. CLI’s stronger FRB was offset by the weaker Real Estate Investment Business (REIB), which was impacted by higher interest expenses and unfavourable foreign exchange rates.
Revenue was S$1,365 million in 1H 2024, representing a slight increase over the same period in 2023. The growth in FRB revenue by 8% year-on-year to S$561 million was underpinned by improved asset performance and contribution from new management contracts in the lodging and commercial management businesses. The fund management business also contributed to revenue growth due to higher event-driven fees. The lower REIB revenue of S$911 million was mainly due to the absence of contributions from properties divested in China, Australia, France, India and Singapore, as well as lower corporate leasing demand in the USA.
EBITDA for 1H 2024 improved by 8% year-on-year to S$819 million, mainly due to higher portfolio gains from asset recycling activities. Portfolio gains at the EBITDA level for 1H 2024 stood at S$69 million, fuelled by the divestment of properties in Singapore, China, and Japan, as well as gains from the accretion of its stakes in CapitaLand Integrated Commercial Trust and CapitaLand China Trust arising from the participation in their distribution reinvestment plans.
Financial highlights
The Group’s listed funds platform also delivered a steady operating performance with net property income improvements. Five new private funds were incepted, bringing total investments under private funds to S$1.7 billion. Lodging management’s RevPAU increased by 6% and new growth engines were added, including a multi-year partnership between The Ascott Limited and Chelsea Football Club. Commercial management’s fee-income related revenue grew by 22%, driven by enhanced asset performance and a restructuring of management fees.
Mr Miguel Ko, Chairman of CLI, said: “CLI’s healthy balance sheet and disciplined capital management enable us to remain operationally resilient amidst the current global macroeconomic uncertainties. We will continue to scale up organic growth in funds, lodging and commercial management and seek out strategic and complementary mergers & acquisitions (M&A) to grow our funds under management (FUM). We see continuing opportunities to capture geographical tailwinds, particularly in Southeast Asia and India, and to expand our product offerings in these markets as well as in Australia, Japan, and South Korea. We will remain prudent and focused on achieving quality fee-related earnings as we expand our capacity for sustainable asset-light growth and create value for all our stakeholders.”
Mr Lee Chee Koon, Group CEO of CLI, said: “Capital recycling remains a key priority in 2024 as we continue to reconstitute our portfolio and improve return on equity for our investors. We will sustain the ongoing momentum of divesting assets in China and the USA, and continue to focus on building new capabilities in markets beyond Singapore and China. We are also strengthening our fund management track record in asset classes such as data centres, wellness and private credit, as well as ramping up capital raising and deployment in lodging, logistics and self-storage. In China, we are growing our network of domestic capital partners and launching new renminbi (RMB) funds as part of our China for China strategy. We look forward to making further progress in these areas in the coming months.”
On 13 August 2024, CLI announced the first close of its sixth onshore RMB fund, China Business Park RMB Fund III, with an initial equity commitment of RMB1.2 billion (S$222 million) to invest in the business park sector in China. CLI has secured an onshore major institutional investor as the fund’s anchor investor. The close-ended fund is expected to add RMB2 billion (S$370 million) to CLI’s FUM when fully deployed.
Commitment to sustainability
CLI continues to build a resilient and resource-efficient real assets portfolio and is committed to achieving Net Zero emissions for Scope 1 and 2 by 2050. In March 2024, CLI released its inaugural Climate Resilience Report, aligned with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. The report features a comprehensive climate scenario analysis of CLI’s diverse portfolio, encompassing over 480 properties across 20 countries and various asset classes. CLI also recently published its 15th Global Sustainability Report, which reported increased focus on reducing Scope 3 carbon emissions through collaboration with tenants and supply chain partners, as part of its decarbonisation journey. Additionally, CLI has decreased its Scope 1 and 2 emissions intensity, demonstrating progress toward its Net Zero targets. CLI continues to be listed on the Dow Jones Sustainability World Index and Asia Pacific Index as well as GRESB [Global Sector Leader – Listed (Diversified) with the highest 5-star rating].
SOURCE: CapitaLand