City Developments’ 1QFY2025 net gearing at 72%; divestments remain key strategic focus

In City Developments Limited’s (CDL’s) 1QFY2025 business update, which ended March 31, 2025, its net gearing ratio, factoring in fair value on investment properties, rose to 72% following the full payment for 51% of a site in the Xintiandi area of Shanghai.

As of end-March, the group’s interest cover was 1.4 times, its cash reserves stood at $2 billion, and its liquidity position was $3.8 billion in cash.

Under its property development segment, Singapore’s total sales value was $1.9 billion for 1QFY2025, up from $736.8 million in the previous quarter.

The group and its JV associates sold 795 units, driven by the launch of its JV project, the 777-unit The Orie, among other already launched projects. Its launch weekend in January saw 668 units (86%) sold at an average selling price of $2,704 psf. To date, 703 units (91%) have been sold.

CDL is preparing to launch the Zion Road JV project in 2HFY2025, a mixed-use integrated development project with 706 residential units across two 62-storey towers, a 36-storey tower with 376 serviced apartments and a retail podium on the first level. The project will be linked directly to the Havelock MRT Station on the Thomson-East Coast Line.

The group’s office portfolio in Singapore achieved committed occupancy of 97.2% driven by full occupancy at City House and King’s Centre. All three of the group’s wholly-owned office assets recorded positive rental reversions.

Meanwhile, the group’s retail portfolio saw a committed occupancy of 96.2% as of the end of March.

Overseas, the group obtained approval for a GBP1.1 billion ($1.91 billion) residential-led mixed-use scheme on the former Stag Brewery site in Mortlake, South West London. It will have 1,068 homes.

The group’s commercial portfolio in the UK achieved an occupancy rate of 82.1%, driven by new leases in 125 Old Broad Street.

In China, design work for the new mixed-use JV development site in Xintiandi is underway, with construction starting in 4Q2025, while the launch of Suzhou’s High-Speed Railway New Town is targeted for launch in 1Q2026.

The group’s China office portfolio recorded a committed occupancy of 52.7%, while the group’s Phuket shopping centre saw a committed occupancy of 91.3%.

For its hotel operations, the group achieved a global revenue per available room (RevPAR) growth of 1.2%, reaching $139.7 supported by higher room occupancy and APR in Australasia, and the rest of UK and Europe.

As part of its capital management focus, CDL has embarked on two portfolio restructuring initiatives since the beginning of the year — the privatisation of Millennium & Copthorne Hotels New Zealand Limited (MCK), and an off-market equal access scheme for its preference shares.

Following the close of the revised offer on May 8, the group holds about 83.9% of all MCK shares, receiving acceptance totalling 8.062% of the total outstanding shares. As the group did not reach the 90% threshold that would have allowed it to acquire the remaining ordinary shares compulsorily, MCK remains listed, and its ordinary shares (and preference shares) will continue to be traded on the NZX.

CDL will not make another takeover under the Takeovers Code for MCK for at least nine months from Apr 22, 2025.

The group announced an off-market equal access scheme to buy back 26,800,814 Preference Shares, representing 10% of the total 268,008,149 Preference Shares in issue at the offer price of 78 cents in cash for each Preference Share.

The key focus for FY2025 is on capital recycling, with significant divestments in the pipeline to reduce gearing and redeploy capital. “Going forward, divestments will remain a key pillar of the Group’s multifaceted strategy,” says the group’s business update.

Shares in City Developments closed 2 cents lower or 0.421% down at $4.73 on May 20.