CapitaLand Investment - OCBC Investment 2023-05-12: 1Q23 Growth Driven By Lodging Business

• CapitaLand Investment (SGX:9CI) provided a business update for 1Q23. Overall revenue increased 5.6% y-o-y to S$702m, as the 11% increase in revenue from its Real Estate Investment Business (REIB) segment to S$447m was partially offset by a 3% decline in revenue from its Fee Income-related Business (FRB) segment.
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• The other areas of its Fee Income-related Business segment saw more modest growth, with its property management and fund management revenues increasing 3% and 1%, respectively. Recurring fee income contributed ~85% of CapitaLand Investment's 1Q23 total fund management fee income.

New targets for its lodging management business

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• Management has set a new target of doubling its lodging management fee revenue to more than S$500m in five years, which would require an annual net room growth rate of 8-10%.
• For 1Q23, portfolio RevPAU rebounded 42% y-o-y to S$81, and this exceeded 1Q19 (pre-COVID) level by ~3%. Growth was driven by all regions, including China (+17% y-o-y). CapitaLand Investment believes it is well-positioned to capture China’s inbound and outbound travel demand as flight frequencies return to pre-pandemic levels.

Remains committed on its S$100b FUM target by 2024

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OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2023-05-12 SGinvestors.io

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