(Sept 28): City Developments Ltd (CDL), controlled by one of Singapore’s wealthiest families, saw its shares slide after it unveiled a hotly anticipated business overhaul that included plans to invest S$5 billion (US$3.9 billion or RM16 billion) in countries such as China and Japan, largely offsetting a divestment drive elsewhere.

The real estate giant — which owns shopping malls, office towers, and marquee hotels around the world — said on Monday that it aims to divest S$6 billion of assets either via sales or by putting them in vehicles it manages. The sales include a retreat from Australia, which chief executive officer Sherman Kwek called “not a market that’s really worked out too well for us”.

The company’s shares tumbled on the news, and worsened throughout the day. They were down as much as 8.2% in afternoon trading, marking their worst performance since April 2025, according to Bloomberg-compiled data.

“I believe very high expectations were priced in and market conditions were overall weak, with the interest rate outlook,” said Vijay Natarajan, an analyst at RHB Bank Bhd (KL:RHBBANK). “The market may be awaiting more granular details on how this will be executed.”

The Singapore-based company’s outlook and succession plans have been a subject of intense discussion among investors after a legal tussle between patriarch chair Kwek Leng Beng and his eldest son, Sherman, in early 2025. The duo later agreed to settle their differences.

CDL signalled a retreat from Australia, where it will aim to sell off 563 living units, its 50% joint venture stake in an office tower in Melbourne and a residential portfolio worth about S$220 million comprising two development sites and four completed projects.

Some other analysts were more positive on the move. DBS Group Holdings Ltd’s Tabitha Foo said investors should “welcome CDL’s much clearer value unlocking roadmap”, while also noting that how the firm executed on the plan should be closely watched. Citigroup Inc, maintaining its buy rating on the stock, also said the new strategy would add value.

CDL’s CEO told analysts and reporters that the S$6 billion asset sale goal was a “floor, not a ceiling” — suggesting it could go even further. The chairman was not present at the briefing. Sherman said he could not speak on his father’s behalf about succession.

The Kweks control about 49% of the firm’s shares. The patriarch and his Malaysian cousin, Quek Leng Chan, dominate the family, which has a net worth of US$25 billion (RM102 billion), according to the Bloomberg Billionaires Index, making them one of Asia’s richest clans.

The firm has fallen short of past targets Sherman laid out amid a challenging global environment, such as plans for a UK-focused REIT that were shelved. His tenure has also long been overshadowed by a major soured bet on a debt-laden Chinese real estate developer.

At the same time, CDL has been supported by the broad strength of the country’s residential market, which helped it to more than triple its profits in the first half of the year.

CDL also unveiled plans to set up a dedicated fund management entity with an investment committee and leadership team to double assets under management to S$10 billion by 2029, via new real estate investment trusts, funds, partnerships and joint ventures. 

The firm is doubling down on the Singapore market, where it aims to deploy 60% of the S$5 billion. The next 30% will go to upper-tier cities in China’s residential market, despite a years-long property downturn there, and Japanese assets such as serviced apartments.

The CEO said CDL would focus its residential investments in Singapore and China, arguing the company needed to stay diversified. “Yes, I know when you put China there, everyone’s spooked,” he said. “But again, we have to look at our business in the longer term.”

Sherman has said a key priority is to reduce CDL’s net debt-to-equity ratio, which includes the fair value of its investment properties and rose to 75% in the first six months of the year. As part of the review, the firm now wants that to come down to about 55% by 2029.

Other details of the review’s conclusions include:

The release of the strategic review’s findings has been delayed since the middle of this year. Sherman had earlier said the developer’s board and management are not under review, and the 10-member board has signed off unanimously on its conclusions.

When asked how shareholders could be confident leadership differences wouldn’t derail the plan, the CEO said the board was united behind the review. “What happened last year was unfortunate, but it’s something that we hope not to ever see happen again,” he said.

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