Will CityDev's recent acquisition of online rental site in China drive growth?

It would at least contribute to the recurring income.

City Developments Ltd. has taken the bold step to enter the fast-growing real estate sector in China with its acquisition of 20% stake in mamahome, a Chinese online apartment rental platform.

According to a report by OCBC Investment Research, the recent maneuver could be a positive move for the group.

"We are overall positive on this investment, given its relatively manageable quantum and that it gives the group exposure to a business segment with significant potential for growth and future synergies," the report stated.

The platform currently has more than 100k apartment listings in 20 Chinese cities, with more than 75% of the listed apartments located in key gateway cities such as Shanghai, Beijing and Guangzhou, and primarily caters to growing demand for mid- to long-term leasing from leisure travellers to business executives.

However, OCBC forecast that while it is expected to contribute to recurring income over the long term, impacts on earnings would likely be limited over the near term.

In the previous quarter, the group's net profit crept up by a measly 2% to $133.8 million despite its booming revenue at $1.1 billion.