CapitaLand Investment - Maybank Research 2023-11-10: Focused Execution ~ Growing Fee Income, Rebalancing Asset Mix

• 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.

Krishna Guha Maybank Research | https://www.maybank-ke.com.sg/ 2023-11-10 SGinvestors.io

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