CDL shares hit one-year low after warning of ‘significantly weaker’ H2 performance

[SINGAPORE] Shares of City Developments Ltd (CDL) hit a one-year low on Thursday (Nov 12), a day after the property group warned that it expects to post a “significantly weaker” financial performance in the second half of FY2026.

It had cited delayed capital-recycling transactions, adverse foreign-exchange movements and potential property impairments as reasons for its forecast.

As at 9.04 am, CDL shares fell 10.1 per cent to a one-year low of S$6.40, before paring losses to trade 6.9 per cent lower at S$6.63 by 9.30 am.

By the midday break, its shares were down 8.3 per cent, or S$0.59, at S$6.53. A total of 5.1 million shares changed hands, worth S$33.7 million.

No married deals were recorded, according to data from ShareInvestor.

CDL said certain capital-recycling transactions originally envisaged for the remainder of FY2026 are now expected to be completed in FY2027, amid persistent inflationary pressures and elevated interest rates.

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This contrasts with H2 2025, when the group recorded a capital-recycling gain of S$473.1 million from the divestment of South Beach Consortium in September that year.

The anticipated weaker performance in H2 2026 is also compounded by adverse foreign-exchange movements, particularly the appreciation of the South Korean won against the Singapore dollar since July.

CDL said the currency movements had resulted in significant foreign-exchange losses at its South Korean subsidiary on an intercompany loan receivable denominated in Singapore dollars.

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CDL flags ‘significantly weaker’ performance for H2 2026

The group is also conducting valuations of its property portfolio, which could result in impairment losses.

As at Sep 30, CDL’s China office portfolio continued to face challenging market conditions. The group said it was “actively pursuing divestment initiatives” and “optimisation opportunities in line with its capital recycling priorities”.

Deleveraging remains a priority

The weaker outlook comes as CDL seeks to reduce its net gearing ratio to about 55 per cent by FY2029, from 75 per cent as at Sep 30.

Under its GET+ strategic road map unveiled in September, the group is targeting S$6 billion in divestments by FY2029 to crystallise embedded value and recycle capital from mature, non-core or underperforming assets.

Proceeds will support balance-sheet strengthening and debt reduction, while providing flexibility for selective reinvestment.

As at Sep 30, CDL’s interest cover stood at 2.7 times. It had cash reserves of S$2.1 billion, while its liquidity position was supported by S$4.8 billion in cash and available committed credit facilities. 

“There are no material concerns over the group’s ability to fulfil its near-term debt obligations,” it said.

Meanwhile, CDL’s Singapore property business continued to record sales during the third quarter.

The group and its joint venture associates sold 124 residential units worth S$322.6 million in Q3, compared with 88 units worth S$313.2 million in the year-ago period. With no new launches during the quarter, sales were primarily from existing projects.

Its Singapore office portfolio recorded committed occupancy of 97.4 per cent as at Sep 30, while its retail portfolio had committed occupancy of 97.1 per cent.

The group’s global hotel operations recorded a 6.4 per cent year-on-year increase in revenue per available room to S$175.20 for the first nine months of 2026.

CDL said the global operating environment remains “challenging”, citing heightened geopolitical uncertainties, financial market volatility and evolving macroeconomic conditions.

It will focus on sustaining operational momentum across its core businesses while navigating these headwinds, the group added.

Shares of CDL closed 1.2 per cent or S$0.09 lower at S$7.12 on Wednesday, before the update.