CapitaLand Investment Posts 79% Profit Plunge on Revaluation Losses

CapitaLand Investment’s attributable profit fell 79 percent to S$181 million ($134.5 million) in 2023, pressured by a second-half loss of S$170 million stemming from markdowns on the Singapore-listed fund manager’s global portfolio.

The firm last year felt the impact of S$568 million in non-cash fair value losses from the revaluation of investment properties, particularly on weaker rents in China and higher cap rates in the US, Temasek-controlled CapitaLand Investment said Wednesday in a release. Operating profit dipped 7 percent to S$568 million.

Full-year revenue fell 3.2 percent to S$2.8 billion on lower corporate leasing income from the Synergy Global Housing business in America and reduced rental revenue from China investment properties. Revenue from fee income rose 12 percent in 2023 to surpass S$1 billion, though fee-income EBITDA edged down 0.5 percent to S$404 million.

“CLI remains focused on executing its strategy to grow asset-light fee-income related earnings, build its fund and lodging management track record, and expand its network of global institutional investors and capital partners,” said chairman Miguel Ko.

Lodging, Divestments Reap Revenue

CapitaLand Investment’s fee-related income from lodging management climbed 28 percent last year to S$331 million as nearly 9,600 units became operational at 53 properties. A rebound in international travel boosted revenue per available unit by 20 percent to S$91 across the lodging segment, which includes the Ascott, Citadines, Somerset and Lyf brands.

The firm chalked up S$213 million in portfolio gains during 2023, with the year’s second half accounting for the lion’s share of S$206 million amid a string of divestments.

The fund manager realised a S$94 million gain from the sale of three hospitality assets in London, Dublin and Jakarta to the listed CapitaLand Ascott Trust and a S$49 million gain from divestment of a 70 percent stake in International Tech Park Chennai, Radial Road to CapitaLand India Growth Fund 2.

The tail end of 2023 featured exits from a pair of Beijing properties, with CapitaLand Investment selling its 95 percent stake in the Capital Square Beijing office building to a joint venture with AIA Life Insurance for a S$30 million gain, following on the heels of the sponsored CapitaLand China Trust selling CapitaMall Shuangjing to an Inner Mongolian investor for an attributable gain of S$7 million.

Fundraising in Focus

Last year saw CapitaLand Investment raise S$2.8 billion in third-party capital, up from S$2 billion raised in 2022, with the firm setting a goal to double its funds under management to S$200 billion by the end of 2028.

Private fund closings in 2023 included the S$350 million CapitaLand Investment Wellness Fund, backed by a capital commitment from Thai developer Pruksa Holding; the S$368 million CapitaLand India Growth Fund 2; and a pair of mainland-focused strategies: the S$530 million CapitaLand China Data Centre Partners and the S$2.1 billion CapitaLand China Opportunistic Partners.

“We will continue to bolster growth in our listed funds through active portfolio management, and further expand our operations and fund management in India and Southeast Asia,” said CEO Lee Chee Koon. “We will also optimise our China portfolio and grow renminbi-denominated funds, as well as increase our fund product offerings in Japan, South Korea, Australia and beyond.”