This article first appeared on GuruFocus .
Release Date: February 11, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
CapitaLand Investment Ltd ( CLILF ) reported a 6% increase in operating profit, indicating a steady growth trajectory.
-
Funds under management increased by $7 billion, reflecting successful fundraising efforts.
-
The company achieved significant fee growth, particularly in fund management fees, which rose by 6%.
-
CapitaLand Investment Ltd ( CLILF ) is making strides in AI and digital initiatives, which are expected to enhance future cost efficiency and operational capabilities.
-
The lodging management segment showed strong potential with record new signings, contributing to long-term growth prospects.
Negative Points
-
Profitability in the fee segment declined slightly due to increased investments in private funds and lodging business.
-
Portfolio gains decreased by 80% compared to the previous year, primarily due to fewer large divestments.
-
China divestments resulted in losses, with assets sold at an average 13% discount to book value.
-
Revaluation adjustments showed a significant drop in China valuations, impacting overall financial performance.
-
The company faces challenges in the China market, with ongoing uncertainties and potential for further write-downs.
Q & A Highlights
-
Warning! GuruFocus has detected 11 Warning Signs with CLILF.
-
Is CLILF fairly valued? Test your thesis with our free DCF calculator.
Q: Can you provide an overview of the potential Funds Under Management (FUM) you could raise this year based on your plans and fund launches? A: We are targeting regional flagship products with a minimum third-party raise of roughly $500 million, which would double with leverage to about $1 billion in FUM. We are confident in launching these products this year, although the fundraising and closing will be a multi-year journey. Additionally, we are seeing increasing traction in self-storage as an investable asset class in Asia, which we plan to capitalize on.
Q: Regarding China, are we past the worst in terms of write-downs, and what is the implied NPI yield based on valuation for the $3 billion of on-balance sheet assets? A: This year, China revaluations were down about 5% on average, with office and business parks being the hardest hit. The NPI for these assets ranges between 3% to 5%, and we hope to improve this by increasing occupancy. While we hope the worst is behind us, there could still be some movement in valuations over the next 12 months.
Q: How do you plan to achieve cost savings, and what are your expectations for strategic M&A synergies? A: Our target is to achieve $50 million in cost savings through increased efficiency and digital initiatives. For M&A, we have started integrating operations from recent acquisitions like Wingate, expecting reasonable savings of 10% to 20%. Future M&A will depend on overlap and potential synergies, with a focus on avoiding duplication of resources.
Q: Can you elaborate on your private credit strategy and expected returns? A: Our private credit strategy focuses on real estate-backed senior lending in developed economies. We aim for net returns to investors between 6% to 10%, with shorter durations of 1 to 3 years. We control the entire loan stack, allowing us to manage risks effectively and achieve returns through strategic leverage.
Q: What is your outlook for divestments in 2026, and do you see any risks in your commercial portfolio? A: We aim to exceed last year's $1 billion in divestments, particularly in China. Our retail portfolio in Singapore remains resilient, supported by controlled supply and consistent reversions. We are open to opportunities in the market, including potential acquisitions if they align with our strategic goals.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
