Morningstar | Experience Across Multiple Property Types Positions CapitaLand Well to Capture Regional Growth
CapitaLand is a property conglomerate with design and development expertise, and active asset-management capabilities across all property types. The firm is well positioned to benefit from emerging-market growth. Singapore and ASEAN remains a core market, which makes up 45% of total assets. An increasing proportion of the population is moving into the middle-class cohort, leading to rising disposable income and consumption growth well above that of developed countries. This wealth effect will drive demand for residential units and higher retail spending at shopping malls, while rising economic growth will underpin demand for well-located offices and serviced residences. CapitaLand has direct exposure to residential, commercial, shopping mall, office and service residence developments. It retains passive exposure to the assets it develops, generally through minority stakes in its listed entities.Income is generated from investment properties in retail malls, offices, service residence, and its funds-management business. Capital is recycled by divesting completed assets into listed units and funds under management. CapitaLand retains large minority stakes and management rights over the listed units, which provide a steady stream of dividend and fee income. A solid record in developing and managing properties ensures CapitaLand's funds-management business is in a strong position to win large development projects and secure funding from institutional investors in establishing property investment funds.The restrictive measures implemented in the Singapore residential property market over the past few years have hampered earnings growth there. CapitaLand has managed down its residential development business in Singapore as the market slowed. But the residential market has shown a recovery in recent quarters and the developer is looking to increase the number of projects in its home market. Meanwhile, rising growth in residential development in China and Vietnam, along with an expansion for Ascott, its serviced residence business, provide greater diversification to future earnings growth.CapitaLand is a real estate company based in Singapore. Co. is engaged in real estate development, investment in real estate, financial products and real estate assets, investment advisory and management services as well as management of serviced residences. Co.'s real estate portfolio includes integrated developments, shopping malls, serviced residences, offices and homes. Co.'s two core markets are Singapore and China. Co. maintains a real estate fund management businesses with assets located in Asia. Co.'s listed real estate investment trusts are: Ascott Residence Trust, CapitaLand Commercial Trust, CapitaLand Mall Trust, CapitaLand Retail China Trust and CapitaMalls Malaysia Trust.
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