City Developments Shares Slide 10% on Weaker H2 2026 Outlook
Singapore's City Developments Limited expects a significantly weaker second half for FY2026, citing delayed asset sales, adverse foreign exchange movements, and potential property impairments.
H2 2026 Performance Warning
Shares of City Developments Limited (CDL) fell sharply on 12 November, hitting a one-year low after the property group forecast a significantly weaker financial performance for the second half of its current fiscal year, FY2026. The company's shares dropped 10.1 per cent to S$6.40 by 9.04 am, before paring some losses to trade 6.9 per cent lower at S$6.63 by 9.30 am.
The decline reflects investor concern over factors including delayed capital recycling transactions, unfavourable currency fluctuations, and potential property valuation adjustments.
Delayed Capital Recycling and Forex Impact
CDL stated that certain capital recycling transactions, initially planned for completion in the remainder of FY2026, are now projected to finalise in FY2027. This postponement contrasts with the S$473.1 million capital recycling gain recorded in the second half of 2025 from the divestment of South Beach Consortium.
Furthermore, adverse foreign exchange movements, particularly the Korean won's appreciation against the Singapore dollar since July, have resulted in significant foreign exchange losses for CDL’s Korean subsidiary on a Singapore dollar-denominated intercompany loan.
Deleveraging Strategy Continues
The weaker outlook comes as CDL prioritises reducing its net gearing ratio to approximately 55 per cent by FY2029, down from 75 per cent as at 30 September. Under its GET+ strategic road map, launched in September, the group aims for S$6 billion in divestments by FY2029.
These proceeds are intended to strengthen the balance sheet, reduce debt, and provide flexibility for selective reinvestment. As at 30 September, CDL maintained an interest cover of 2.7 times, with S$2.1 billion in cash reserves and S$4.8 billion in total liquidity, indicating no immediate concerns regarding its debt obligations.
Despite the challenges, CDL’s Singapore property business showed resilience. The group and its joint venture associates sold 124 residential units, totalling S$322.6 million, in the third quarter of 2026. This compares favourably to 88 units sold for S$313.2 million in the same period last year.
Singapore office and retail portfolios reported high committed occupancies of 97.4 per cent and 97.1 per cent respectively as at 30 September. Global hotel operations also saw a 6.4 per cent year-on-year increase in revenue per available room (RevPAR) to S$175.20 for the first nine months of 2026. Investors will watch for updates on asset sales in FY2027.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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