Restructuring of CLI to unlock substantial long-term value: CapitaLand CEO

CapitaLand plans to restructure and list CLI to include its investment management platforms and lodging business.

The restructuring and listing of CapitaLand Investment Limited (CLI), which will include both its investment management platforms and its lodging business, will allow the company to unlock substantial long-term value, CapitaLand CEO Lee Chee Koon said.

“CapitaLand has consistently traded at a 20% to 25% discount to net asset value (NAV). Whilst this is comparable to other developers in the region, proven real estate investment managers tend to trade at a premium to NAV. With our strong track record in growing fee income for our fund and lodging management businesses, and our disciplined capital recycling, we are confident that CapitaLand’s proposed restructuring will allow CLI shareholders to potentially benefit from the substantial long-term value that we will aim to unlock,” Lee said in a virtual dialogue session with shareholders, 28 July, parts of which were shared in a bourse disclosure on 4 August.

He defended the move to group the investment management platform with the lodging management platform, adding that those two are both based on managing third-party capital and earning a fee.

“Therefore, these two capital-efficient businesses are complementary, and a good fit for CLI. As our lodging platform continues to emerge from the worst of the pandemic, and scales towards our planned target of 160,000 units under management by FY2023, we expect the business to contribute materially to CLI’s overall earnings on a recurring basis,” said Chief Finance Officer Andrew Lim.

The proposed transaction is subject to the approval of shareholders on a virtual meeting to be held on 10 August.

Shareholders who wish to register and submit questions for the meeting can do so until 7 August, 2:00 pm through CapitaLand’s pre-registration website, email or post.