CDEVY Overview

Sale of Quayside Isle: City Developments Ltd. (CDL) has agreed to sell its waterfront retail asset, Quayside Isle @ Sentosa Cove, for S$97.3 million, reflecting a significant premium over its book value.

Market Validation: The sale price of approximately S$2,205 per square foot indicates strong market validation of the asset's quality and unique positioning.

Completion Timeline: The transaction is expected to be finalized in the first quarter of 2026, following a competitive bidding process that attracted local and international investors.

Capital Management Strategy: CDL's CEO highlighted that this divestment aligns with the company's capital recycling strategy, allowing them to unlock value while maintaining a balanced approach to capital management.

Acquisition Details: City Developments Ltd. (CDL) has acquired the 706-room Holiday Inn London at Kensington High Street for £280 million (approximately S$480.2 million), with a cost of £396,600 (around S$680,200) per room.

Investment Strategy: The acquisition aligns with CDL's strategy to enhance its portfolio quality and increase its presence in Central London, now owning over 3,000 hotel rooms in the area.

Financial Performance: The hotel has maintained high occupancy rates of over 97% for the nine months leading to September 2025, with total revenue exceeding £39 million (around S$66.9 million) in the previous year.

Market Impact: Following the announcement, CDL shares rose by 0.97% to S$7.27 on the Singapore Stock Exchange, reflecting positive market sentiment regarding the acquisition.

Sale of Bespoke Hotel: City Developments Ltd. (CDL) has agreed to sell the Bespoke Hotel Osaka Shinsaibashi for 14 billion yen (S$117 million) to Blackstone's real estate funds, with the transaction expected to complete in December 2025.

Strategic Divestment: The sale reflects CDL's strategy to capitalize on Japan's hospitality demand and is part of a broader capital recycling initiative, bringing total divestments to over S$1.8 billion this year.

Acquisition Background: CDL acquired the hotel in August 2023 for 8.5 billion yen, benefiting from Japan's reopening to international travel, which has boosted the hospitality sector.

Market Impact: Following the announcement, shares of CDL were trading at S$7.08 on the Singapore Exchange, while Blackstone's shares saw a slight decline on the New York Stock Exchange.

Stable Third Quarter Performance: City Developments Limited (CDEVY) reported a stable third quarter in 2025, supported by strong property sales and high occupancy rates in its investment portfolio.

Strong Sales Figures: The company sold 88 units at The Orie in Singapore for $313.2 million, contributing to year-to-date sales of 990 units totaling $2.5 billion, with plans to add over 700 Executive Condominium units to its pipeline.

Occupancy Trends: While Singapore's office and retail buildings maintained high occupancy, hotel performance varied, with improvements in Europe and Australasia countered by weaknesses in Asia.

Current Trading Status: CDEVY's stock is trading at $5.79, reflecting a slight increase of $0.06 or 1.05 percent on the OTC Markets.

Financial Performance: City Developments reported a revenue of S$1.69 billion (up 8.0%) and net income of S$86.5 million (up 4.8%) for the first half of 2024, with an EPS increase to S$0.097 despite a slight decline in profit margin.

Market Outlook: The company anticipates a revenue growth of 14% per annum over the next three years, significantly outpacing the 1.1% growth forecast for Singapore's Real Estate industry, while also noting a recent 6.3% rise in its share price.

Valuation of City Developments: The fair value estimate for City Developments is S$7.64, indicating that the current share price of S$5.12 suggests a potential undervaluation of 33%. Analysts have set a target price of S$6.04, which is 21% lower than the estimated fair value.

Investment Considerations: While the discounted cash flow (DCF) model provides insights into valuation, it has limitations and should not be the sole analysis tool. Investors are encouraged to assess risks, future earnings growth compared to peers, and explore other high-quality stock alternatives before making investment decisions.