C
apitaLand Investment Limited (CLI) is at a critical juncture as it seeks to expand its funds and assets under management globally. Despite a 17.1% dip in share price to S$2.62 in 2024, CLI's blue-chip status makes it an attractive play for investors looking for promising stocks with latent potential. The real estate investment manager reported a mixed financial performance for the third quarter (3Q 2024) and nine-month 2024 (9M 2024), with fee income-related business revenue rising 6% year on year to S$845 million, but real estate investment business revenue dipping by 2% to S$1.4 billion.
Total revenue inched up just 0.9% year on year to S$2.1 billion for 9M 2024, while real estate assets under management (AUM) remained flat at S$134 billion as of September 30, 2024. However, funds under management (FUM) grew slightly from S$99 billion to S$102 billion over the same period. CLI's lodging division saw revenue per available unit (RevPAU) increase by 4% year on year to S$93.
The group has ambitious plans to grow its business, including increasing FUM to S$200 billion by 2028 and doubling fee-related business operating profit from S$318 million in 2023 to more than S$650 million by 2028-2030. CLI also aims to accelerate geographical diversification in Asia Pacific, Europe, and the US.
Recent business developments have been encouraging, including the acquisition of a 40% stake in SC Capital Partners for S$280 million to deepen its presence in Japan and the appointment of two senior hires in Australia to spearhead growth in real estate private equity and credit funds. However, CEO Lee Chee Koon warned of tough conditions this year due to ongoing global conflicts and high interest rates, which may impact CLI's ability to grow as it forges ahead with its Investor Day objectives.
Despite these challenges, CLI has communicated its goals clearly and taken steps to grow its FUM while expanding its presence geographically. However, investors need to watch out for the risks and challenges that lie ahead in 2025.
