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CapitaLand Investment (SGX: 9CI)

CapitaLand Investment, Singapore Retailers Association ink MOU to support S' pore retailers entering JB

CapitaLand Investment Ltd (CLI) 2026 Update: Strong Asset-Light Growth, Rising Fee Income & Positive Outlook

• 1Q26 revenue of S$487mn (-2% YoY) was slightly below our estimates, forming 21% of our FY26e forecast. Fee-related revenue was the standout performer, rising 10% YoY, driven by strong growth in listed (+14%) and private funds (+58%) management, while REIB revenue declined 14% following the divestment of the Synergy platform.
• Capital raising activity remained resilient despite a weaker macro backdrop amid the Middle East conflict, with S$2.5bn in equity raised across listed and private funds YTD, alongside S$7.2bn in deployment YTD.
• Maintain BUY with an unchanged SOTP-TP of S$3.69 and no changes to forecasts. The listing of a second C-REIT in the next couple of months should support continued capital recycling. We continue to favour CLI for its robust and growing recurring fee income and asset-light strategy, which underpins resilience amid macro uncertainty. However, we expect fundraising momentum and deployment to moderate from the strong 1Q26 levels in the coming months amid a more uncertain macroeconomic backdrop. While Singapore deals remain relatively more resilient given market stability, other markets are more cautious amid concerns around cost pressures and the potential impact of inflation on interest rates.

Merger with Mapletree may not be a good fit, some shareholders tell CapitaLand Investment

SINGAPORE -  CapitaLand Investment (CLI)  responded at length to a shareholder&rsquo s question on a rumoured acquisition of Mapletree Investments, reiterating that it would not pursue deals simply to meet its $200 billion funds under management (FUM) target by 2028.

At its annual general meeting on April 28, the real asset manager said any merger and acquisition (M& A) would have to deliver clear benefits to shareholders.

More than 800 shareholders attended the meeting at the Sands Expo and Convention Centre.

The Wall Street Journal first reported on Nov 3, 2025, that the two asset managers were exploring a merger. Since then, neither has confirmed the talks  nor  provided any updates.

But group chief executive Lee Chee Koon had told the media at  CLI&rsquo s financial year 2025 results briefing  on Feb 11 that the company was assessing numerous possible deals on their affordability and ability to be integrated into CLI.

The shareholder who posed the question noted that Mapletree, which has $80.3 billion in assets under management as at March 31, 2025, may not be the right fit for CLI.

He added that while the real estate investment firm has expanded into data centres and purpose-built student accommodation, these segments have also seen impairments, where losses are booked when assets are worth less than expected.

The shareholder said Mapletree&rsquo s asset strategy appears to be &ldquo vertically siloed&rdquo , with its two real estate investment trusts (REITS) &ndash Mapletree Investment Trust and Mapletree Logistics Trust &ndash focusing on industrial and logistics assets.

A merger of these assets could run counter to CLI&rsquo s risk diversification strategy through CapitaLand Ascendas REIT, its biggest industrial REIT.

&ldquo I hope we don&rsquo t do things just to grow the FUM,&rdquo the shareholder said. &ldquo This is something that really troubles a lot of us.&rdquo

Analysts had previously rated a potential merger as a positive move for CLI to expand its scale, allowing the merged entity to compete against global giants in real estate and asset management such as Blackstone and Brookfield.

In response, CLI&rsquo s chairman Miguel Ko reassured shareholders that CLI has not wavered from its commitment to pursuing meaningful M& As. &ldquo We are here to ensure that all of you in this room are well protected.&rdquo

Independent director Anthony Lim said that in any deal that it seeks to complete, the board would not only have to address the views of its minority shareholders but those of its majority shareholder, Temasek, too.

CLI would assess the reasons for acquiring any company, and weigh its worth against its price, as well as the payment structure.

Mr Lee added that there is no perfect deal, and CLI would assess how it can address any shortcomings in a company it acquires.

China concerns

Mounting pressures in China&rsquo s real estate market were also a key concern for CLI&rsquo s shareholders.

They raised questions about the real asset manager&rsquo s strategy in China and how it plans to monetise its assets, as plunging valuations drove its profit down from $479 million to $145 million for the 2025 financial year.

Mr Puah Tze Shyang, chief executive of CLI China, said that the company has the greatest exposure to commercial real estate, and rents in the country have been declining over the last three to four years as a result of a slowdown in the Chinese economy and domestic consumption. It is hoping for a stabilisation in the property market and a recovery in consumption sentiment, before rents begin to improve.

Mr Lee added that weaker performance at CLI&rsquo s business parks in China was partly due to an oversupply of commercial space in several cities, as well as fewer foreign firms expanding there and local companies adopting a &ldquo wait-and-see&rdquo approach.

But it is beginning to see green shoots of recovery, particularly in the retail sector, which has shown the most resilience. The hotel and rental apartment sectors are also expected to recover more quickly, although business parks and offices would take longer, he said.

Double-digit ROE

A representative of non-profit research house Corporate Monitor asked the board how it intends to improve the company&rsquo s return on equity (ROE), which has been below 5 per cent over the last six years.

ROE measures how well a company uses shareholders&rsquo money to generate profit.

Chief financial officer Paul Tham acknowledged that the China business had &ldquo dragged down&rdquo the company overall. Its ROE, averaging around 4 per cent over the last two years, would have gone up to 6.7 per cent in financial year 2024 and 6.9 per cent in financial year 2025 if not for the Chinese market downturn.

He noted that a double-digit ROE figure remains the target. As fee income-related businesses continue to grow and the company continues to divest assets, it should hit an ROE of 8 per cent to 9 per cent &ndash excluding the China business &ndash in the coming years.

Despite ongoing challenges in the China market, CLI is preparing to launch its second China REIT (C-REIT), first announced on Feb 11, in the late second quarter or early third quarter of 2026.

The asset manager successfully listed its first C-REIT, known as  CapitaLand Commercial C-REIT, on the Shanghai Stock Exchange on  Sept 29, 2025.

It is now aiming to combine both C-REITs into a &ldquo single flagship C-REIT that combines scale&rdquo , subject to regulators&rsquo guidance and support, said Mr Puah.

This would not only allow CLI China to recapitalise some of its stabilised China assets, but also afford it greater scale and diversity of asset classes, which are factors that lead to a &ldquo more robust performing C-REIT&rdquo .