City Developments Limited – Resilient operations, but divestments delayed November 16, 2026 4

PSR Recommendation: BUY Status: Maintained
Last Close Price: 6.64 Target Price: 11.32
  • No financials were provided for the 3Q26 operational update. Capital recycling transactions originally envisaged for the remainder of FY26 are expected to be completed in FY27 instead, amid challenging market conditions and elevated interest rates. Net gearing remained stable QoQ at 75%.
  • Operations remain resilient. 3Q26 residential sales value in Singapore grew 3% YoY to S$322.6mn despite no new launches during the quarter. Occupancy across Singapore investment properties remained high at 97.4% for office and 97.1% for retail, alongside positive rental reversions. Hotel operations also remained healthy, with RevPAR growth accelerating to +6.4% in 9M26 from +4.9% in 1H26.
  • Maintain BUY with an unchanged RNAV target price of S$11.32, based on a 25% discount to our RNAV of S$15.09. Our FY26e forecasts are unchanged. CDL has guided for weaker YoY performance in 2H26 due to the high base in 2H25 from the S$473.1mn gain on the South Beach divestment. Performance may also be affected by adverse FX movements and potential impairment losses arising from year-end property valuations. The targeted S$6bn divestment programme expected in FY27e comprises the UK legacy residential portfolio (c.S$800mn), selected owned hotels and Australian commercial and residential assets.

 

The Positives
+ Resilient property development sales, with 730 units up for launch in 1Q27. 3Q26
residential sales value rose 3% YoY to S$322.6mn despite no new launches during the
quarter. Lucerne Grand at Lakeside Drive was launched in October, achieving a 61% take
up rate over its launch weekend, with 73% sold to date. Two EC projects, the 430-unit
Wynwood Grand and 300-unit Solano Grand, are scheduled for launch in 1Q27. We
expect healthy take-up rates, as both projects were acquired before the May 2026 EC
policy changes and will therefore remain subject to the previous policy framework.

+ RevPAR growth accelerates. RevPAR grew 6.4% YoY in 9M26, accelerating from 4.9% in
1H26, driven by improvements in both occupancy (+2.3ppts to 75.2%) and average room
rate (+3.1% to S$232.9). The US recorded the strongest RevPAR growth (+15.4%),
followed by Australasia (+11.8%) and Singapore (+3.0%). 9M26 gross operating margin
also improved by 0.5ppt to 32.5%. We expect RevPAR growth to remain at similar levels
in 4Q26, supported by the recovery in corporate and group travel.

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About the author

Profile photo of Darren Chan

Darren Chan
Research Analyst
PSR

Darren has over three years of experience on the buy-side as a fund manager. During his time as fund manager, he has managed multiple funds and mandates including dividend income, growth, customised, Singapore focused and regionally focused funds. He graduated from the University of London with a First-Class Honours degree in Banking and Finance.

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