CapitaLand Investment (SGX:9CI)'s 3Q23 business updates indicate steady growth of recurring fee revenue, expanding lodging business and accelerating capital raising for private funds.
Capital deployment and recycling remain muted due to challenging markets, especially in China. Management continues to focus on diversifying its geographic and sector mix.
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We maintain our forecasts but lower our target price for CapitaLand Investment by factoring in a lower value for stakes in REITs.
Steady recurring fee revenue
CapitaLand Investment's fee-related earnings (FRE) for 9M23 grew 5% y-o-y (adj. 9%) to S$799m. This was supported by 31% growth in lodging management fees and 6% higher commercial management fees.
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Meanwhile, fee rate fell from 53bps to 44bps due to absence of event-driven fees.
Recurring fees from listed and private funds grew 9% and comprised 89% of fund-related fees. Commercial management fees grew 6% y-o-y due to improved operating performance of the properties and acquisitions of new assets.
Lodging business growing, albeit slowly
Read more at SGinvestors.io.
Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
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