Southeast Asia’s largest property developer CapitaLand Ltd is restructuring its businesses to focus on its core markets of Singapore and China, which together account for more than half of its revenue.
CapitaLand, about 40 percent-owned by Singapore state investor Temasek Holdings, is considering exiting from the office and home segments in the United Kingdom and India, but will remain invested in serviced residences and malls, Chief Executive Officer Lim Ming Yan said on Thursday.
Europe accounted for 7 percent of CapitaLand’s revenue in 2011, while Asia, excluding Singapore and China, accounted for just 5 percent, Thomson Reuters data shows.
“It doesn’t make sense for us to be fully engaged in India.”
Lim told reporters after announcing key management changes.
“It’s not the value of the investments.
It’s really the management focus and management attention that is needed.”
He said CapitaLand is considering exiting the Gulf Cooperation Council, a six-member trade bloc in the Middle East.
The firm is also reviewing its presence in Australia and Việt Nam.
CapitaLand, which has a 59 percent stake in Australand Property Group, was treating its Australand holding more like a financial investment, and that Australand’s business model differed from CapitaLand, Lim said.
The investment in Australand accounts for about 14 percent of its asset base, CapitaLand officials said.
“What I think they are trying to do is to address investor concerns of them being too complex, with exposure to too many places and segments.
With new management, this is probably their first step in trying to address their complex structure,” said Donald Chua, an analyst at CIMB Research.
“This year, for CapitaLand, a lot of their China projects will be completed, which means a lot of the income will flow through this year,” said Chua.
CapitaLand shares rose 2.1 percent to end at S$3.84 on Thursday, their highest level since January 2011.
The stock surged around 67 percent last year, beating the 48 percent rise in the FT ST Real Estate Index.
Out of 23 brokers tracking CapitaLand, 17 have a buy or strong buy rating on it, five have a hold and one has a sell rating.
CapitaLand has organised its businesses into four main areas – CapitaLand Singapore, CapitaLand China, CapitaMalls Asia and The Ascott Ltd.
CapitaLand competes with Hong Kong’s Cheung Kong (Holdings) Ltd, Sun Hung Kai Properties Ltd and Singapore’s City Developments and the privately-held Far East Group.