UOB Kay Hian Research has reiterated its ‘buy’ recommendation for CapitaLand Investment (CLI), maintaining a target price of $3.49, reflecting a 28.3% upside from the current share price of S$2.72. Despite a 24% year-on-year drop in revenue to $1.04b for the first half of 2025, the company’s strategic initiatives in capital recycling and lodging expansion are expected to drive future growth.
CapitaLand Investment, a global real estate manager with a strong presence in Asia, reported a decline in its profit after tax and minority interests by 13% year-on-year to $287m. This was attributed to the deconsolidation of CapitaLand Ascendas REIT and the loss of contributions from divested assets. However, the company executed $3.1b in transactions and raised $2.1b in capital, indicating robust underlying performance.
The company is optimistic about the second half of 2025, with plans to scale its fee-related earnings through new fund launches and capital raising. Its lodging business saw a 5% increase in revenue per available unit (RevPAU), driven by higher occupancy rates and average daily rates. Additionally, CapitaLand Investment is on track to list its CapitaLand Commercial C-REIT, aiming to establish a perpetual onshore fund platform in China.
UOB Kay Hian noted that CapitaLand Investment’s asset-light growth strategy, supported by $116b in funds under management, remains a key driver for the company. The research firm also highlighted the potential for stronger-than-expected growth in funds under management and successful listing of the C-REIT as catalysts for the stock.
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