CapitaLand Investment (CLI) aims to grow its funds under management (FUM) in certain regions including Australia, South Korea and Japan to 25% - 35% in 2028 from 18% year-to-date in 2024. While the group has kept its FUM growth target of $200 billion, CLI aims to lower its FUM percentage in China to 10% - 20% from 27% before As at Sept 30, China’s FUM made up 30% of CLI’s total FUM or $30.6 billion.
This comes as the group notes challenges such as diminished market activity, rising interest costs, declines in asset valuation as well as concerns over its China market.
In its investor day slides released on Nov 22, the group sees that China’s contribution to CLI is expected to moderate while adding that the acceleration of geographic diversification is necessary for the group’s growth moving forward.
CLI’s group chief financial officer (CFO) Paul Tham adds that the group is looking to more than double its operating earnings to over $1 billion by 2028 to 2030 with 60% to 70% coming from high quality fee businesses.
“Fee growth will be driven by steady listed REIT growth, accelerated private funds growth and strong growth from lodging and commercial management,” says Tham. “This will come from a blend of organic expansion, new listings and funds and mergers and acquisitions (M&A).”
CLI would also like to have REITs listed in the domestic markets of Australia, India and China, said group chief operating officer (COO) Andrew Lim at this year’s investor day briefing. While the group has spoken about India and China previously, Australia is new on the group’s wish list.
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During the question and answer (Q&A) session, Miguel Ko, chairman of CLI, said that the decision to sell Australand Property Group and invest more in China was before his time. He added that the company "did not have a crystal ball of course about China's situation today" without wanting to comment on his predecessors' decisions. At the time, China was booming and CapitaLand had a huge competitive advantage. “That could have been a major win or a wrong move. This is not a comment on whether my predecessors made a right or wrong decision.”
At the time, Lim Ming Yan, CapitaLand’s then-president and group CEO said that the divestment comes amid “favourable” market conditions. Australand’s share price also performed strongly in the past few months before. "This divestment would allow us to reallocate capital to our core businesses in Singapore and China."
CapitaLand sold its remaining 39.1% stake in Australand in March 2014 after partially divesting its stake to improve trading liquidity in November 2013.
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The group’s FUM year-to-date is $113 billion.
As at 2.35pm, shares in CLI are trading 1 cent higher or 0.36% up at $2.80.
