Property Developers in a Lower-Rate World: CapitaLand, CDL and UOL Under the Spotlight

The Smart Investor10-08

Sustained high interest rates over the last few years have impacted property developers negatively through higher financing costs and softer demand for properties. With interest rates expected to ...

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class=\"title\">\nProperty Developers in a Lower-Rate World: CapitaLand, CDL and UOL Under the Spotlight\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-10-08 07:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://thesmartinvestor.com.sg/property-developers-in-a-lower-rate-world-capitaland-cdl-and-uol-under-the-spotlight/><strong>The Smart Investor</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Sustained high interest rates over the last few years have impacted property developers negatively through higher financing costs and softer demand for properties. \nWith interest rates expected to ...</p>\n\n<a href=\"https://thesmartinvestor.com.sg/property-developers-in-a-lower-rate-world-capitaland-cdl-and-uol-under-the-spotlight/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SG9999006266.SGD","symbol_name":"MANULIFE SINGAPORE EQUITY \"A\" (SGD) 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INC"},"translate_title":"低利率世界中的房地产开发商：凯德置地、CDL和UOL成为焦点","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CFA.SI":1.5,"U14.SI":1.5,"GDV":1,"9CI.SI":1,"C09.SI":1.5,"CDL":1.5,"PRS":1},"content_text":"Sustained high interest rates over the last few years have impacted property developers negatively through higher financing costs and softer demand for properties. \nWith interest rates expected to trend lower, it might finally be time for them to shine. \nHere, we put the spotlight on three blue-chip developers with unique strengths: CapitaLand Investment (CLI), City Developments Limited (CDL), and UOL Group Ltd (UOL).  \nCapitaLand Investment (CLI) — The Asset-Light Capital ManagerCapitaland Investment Limited (SGX: 9CI), with its fee-driven model, provides investors with a defensive option for real estate exposure.  \nCLI posted the following results for the first half of the year ended 30 June 2025 (1H2025): \nRevenue slumped by 24% year on year (YoY) to S$1.04 billion.\nOperating Profit decreased 12% YoY to S$260 million. \nNet Profit declined 13% YoY to S$287 million. While its latest financials are disappointing, there are some encouraging signs in their key operational metrics. \nRecurring fee income increased 5% YoY to S$572 million (making up more than 50% of total revenue). \nAssets under Management grew 17% YoY to S$117 billion. \nCLI’s lodging platform remains resilient, with Revenue per Available Unit (RevPar) increasing 5% YoY to S$88, driven by a higher occupancy rate and average daily rate. \nSigned units increased YoY, with more than 9,400 units signed year-to-date through July 2025 (compared to over 8,000 units in the prior year period), while opened units reached approximately 4,000 units\nCapital recycling reached S$584 million YTD as of 13 August 2025. \nNew acquisitions include Wingate’s property and corporate credit investment management business in Australia, and a Singapore data centre facility (9 Tai Seng Drive). \nThe listing of its CapitaLand Commercial C-REIT, alongside its recent launch of its first onshore master fund in China, bodes well for its fund management segment.  \nThe company is moderately geared, with a net gearing ratio of 0.46 times, an interest coverage ratio (ICR) of 3.9 times, and an average debt maturity of 3.2 years. \nCLI’s fee-driven model results in less reliance on property sales compared to traditional developers; its income and earnings are, therefore, more resilient. \nLower interest rates lead to an increase in institutional capital inflow into its real estate funds, increasing valuation and reducing funding costs.  \nCity Developments Limited (CDL) — The Hospitality & Residential SpecialistCity Developments Limited (SGX: C09) provides an option for investors seeking exposure to a traditional property developer. \nCDL reported encouraging 1H2025 results. \nIts Singapore residential segment saw 903 units sold, representing an increase of 54% in volume and 90% in sales value YoY. \nTake-up rate for its Singapore residential pipeline remains solid, with around 740 units unsold from approximately 2,260 units in the pipeline.\nGross development value (GDV) for its Global Living Sector soared 44.4% YoY to S$3.9 billion.\nMeanwhile, its hotel operations, which is a key revenue contributing segment (43.5% of revenue), reported encouraging metrics. \nRevenue per available room (RevPAR) in the first half of 2025 increased 0.5% YoY to S$155.6, driven by a 1.7% increase in its average room rate to S$219.20, offset by occupancy rate declining 0.8 percentage points YoY to 71%. \nCDL has a net gearing ratio of 70% with an ICR of 2.4 times, and an average debt maturity of two years. \nA majority of its debt profile is variable rate (57% of debt); CDL will benefit from lower interest costs as it refinances its upcoming debt, leading to lower interest costs and reduced gearing. \nSome upcoming Singapore residential launches include Project Zyon Grand, Lakeside Drive, Woodlands Drive, and Senja Close, totalling around 2,000 units. \nCDL’s overseas pipeline includes 4,564 units of private rental housing (PRS) and 2,368 student accommodations under development in the UK, 40 PRS assets (2,246 units) under development in Japan, and 560 PRS units in Australia. \n\nCDL’s strong hospitality portfolio should benefit from a travel rebound, while lower mortgage rates could lift residential demand for its development projects. \nAs a more cyclical player compared to CLI, CDL is positioned to benefit more rapidly from an economic upturn, offering investors greater upside potential as interest rates decline.  \nUOL Group (UOL) — The Balanced All-RounderUOL Group Ltd (SGX: U14) offers a balanced mix of residential, commercial, and hospitality property exposure. \nUOL provided a positive 1H2025 update for its three segments.\nIts residential segment saw strong momentum with new launches such as Parktown Residence and UPPERHOUSE at Orchard Boulevard, achieving 92% and 64% of units sold respectively. \nOngoing projects also reported high sell-through rates: Pinetree Hill at 88%, Watten House at 95%, and Meyer Blue at 69% sold. \nOffice and retail occupancy levels remain high at 96.6%, up 3.2% YoY, and 97.3%, down 2.1% YoY, respectively. \nMeanwhile, its hotel performance through Pan Pacific Hotels Group saw increased demand, with average occupancy rates increasing from 67.7% to 71%. \nAverage RevPAR also increased 9.1% YoY to $180.30, showcasing the company’s pricing power. \nThe hospitality pipeline remains robust with 1,634 rooms in development.\nUOL has an extremely low net gearing ratio of 0.25 times and an ICR of seven times. \nIt has a balanced debt profile where 69% of debt is fixed-rate.  \nUOL’s diversified portfolio of assets provides stability across cycles. \nRate cuts should support both valuations (NAV uplift) and earnings recovery.\nSector OutlookFalling interest rates are a boon for property developers as lower funding costs improve margins and enhanced affordability drives residential demand. \nTheir hospitality segment gets a dual boost from both a tourism recovery and reduced refinancing costs, while commercial properties and fund management platforms should see uplift from improving valuations and increased capital flows.\nWith rate cuts expected to continue, the sector is positioned for a multi-faceted recovery across residential sales, recurring income streams, and asset values.\nGet Smart: Three Different Ways to BenefitThese three blue-chip Singapore developers offer distinct ways to benefit in a lower-rate environment. \nCLI is a defensive stalwart; its capital-light model provides earnings resilience, with long-term growth driven by recurring fee income and its expanding lodging platform. \nCDL offers a more cyclical play with potentially greater upside from hotel recovery and residential sales momentum. \nUOL presents a balanced approach through its diversified portfolio across residential, commercial and hospitality assets, combining stability with growth potential.\nHow do rich Singaporeans invest when volatility hits?\nThey turn to companies with cash, history, and discipline. This free report highlights 5 blue chips that deserve your attention. Get your copy here and see who made the list.\nFollow us on Facebook, Instagram and Telegram for the latest investing news and analyses!\nDisclosure: Wesley does not own shares in of the companies mentioned.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.35.11","shortVersion":"4.35.11","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2573992562","isCrawlerRequest":true}