In its 3QFY2024 updates for the quarter to Sept 30, CapitaLand Investment (CLI) reported that it has exceeded its divestment target of $3 billion for 2024 including assets divested after the end of the third quarter.
Notably, it divested its 50% stake in ION Orchard to CapitaLand Integrated Commercial Trust
CLI also sold eight more US multifamily assets, bringing the total sales this year to 16 assets for $1.2 billion.
Additionally, CLI divested more than $600 million of assets across its fund vehicles in October (after the quarter ended). These include two lodging assets by Ascott Serviced Residence Global Fund, another three by CapitaLand Ascott Trust HMN (CLAS), and a logistics property by CapitaLand Ascendas REIT A17U (CLAR).
In total, CLI has divested $4.6 bilion in assets, of which its effective share is $4.1 billion. Of the $4.6 billion, 46% was divested to its REITs, 27% was divested to external parties by CLI, 16% was divested to private funds, and 11% was divested by the REITs to external parties. 62% of the divestment value was retained and converted into funds under management (FUM). Year-to-date up to Nov 5, CLI's FUM stands at $102 billion of which 72% is perpetual, 12% is more than five years, and 16% is less than five years. Out of the $102 billion, $39 billion of FUM are in private funds, and the rest in listed funds (REITs).
During the year, CLI managed to raise $1.6 billion of private capital, of which more than $900 million was raised since 3Q2024. On Nov 5, CLI raised $261 million from Mitsui O.S.K. Lines for the CapitaLand SEA Logistics Fund and the CapitaLand India Growth Fund
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On the revenue front, for the nine months to Sept 30, CLI reported at 6% y-o-y rise in its fee income-related business (FRB) to $845 million.
However, its real-estate investment business (REIB) fell by 2% y-o-y to $1,419 million, taking total revenue to $2,104 million up marginally y-o-y, after $160 million was deducted for corporate and others.
CLI’s FRB business comprises fees from listed funds management, private funds management, lodging management and commercial management (previously property management). Both private funds management and commercial management were up 14% y-o-y, with commercial management the largest contributor to FRB with $281 million for 9MFY2024.
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Capital management metrics remain robust, with a net gearing ratio of 0.54x, and interest coverage ratio at 3.7x. Implied interest cost was 4.1%, and 64% of debt was at fixed rates.
CLI says it remains committed to recycling balance sheet assets and improving fund capital efficiency to optimise capital base with sufficient dry powder for M&A and organic growth; supporting FUM growth by recycling assets into new funds, and drive organic growth in funds management and strategic M&As to scale up FUM to the $200 billion target.
