City Developments - CGS-CIMB Research 2021-10-05: Positioning For The Future

CITY DEVELOPMENTS LIMITED (SGX:C09) | SGinvestors.io CITY DEVELOPMENTS LIMITED (SGX:C09)

City Developments - Positioning For The Future

  • We hosted City Developments for an investors call. Topics included Singapore residential market, optimising property/portfolio returns and recurring income streams.
  • Management reiterated its focus on executing a multi-dimensional growth strategy to future-proof City Developments’s business model.
  • Reiterate ADD rating on City Developments with an unchanged target price.



Building a multi-dimensional business

  • City Developments (SGX:C09)'s management reiterated its GET (Growth, Enhancement, and Transformation) strategy as part of its move to future-proof its business through a multi-dimensional model. This includes building a recurring income stream, optimising property returns through asset enhancements/redevelopments and transforming its business via strategic investments and fund management activities, while diversifying its development business beyond Singapore.


Diversifying development activities beyond Singapore

  • We expect Singapore residential to continue to form the majority of development contribution in the near term. Together with the upcoming launch of the 696-unit CanningHill Piers, land parcels in Northumberland Road and Tengah Walk and residential component of Fuji Xerox redevelopment, we estimate City Developments has a development pipeline of ~2,000 units.
  • With residential and land prices remaining elevated, management expects development margins to remain compressed in the near term.
  • City Developments has also diversified its development activities into Australia, UK, Japan and Vietnam and we anticipate these overseas contributions to gradually pick up in the medium term.


M&C strategic review and building recurring fee income

  • Apart from the strategic review of M&C’s hotel portfolio, currently underway, value unlocking through environment remains challenging, City Developments is seeing signs of recovery with a positive GOP achieved in Jun 2021.


Reiterate ADD rating on City Developments






LOCK Mun Yee CGS-CIMB Research | https://www.cgs-cimb.com 2021-10-05
SGX Stock Analyst Report ADD MAINTAIN ADD 8.970 SAME 8.970



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