SINGAPORE – City Developments Limited (CDL) has increased dividends in FY2025, with dividends now representing a payout ratio of 40 per cent, the company said in a filing on the Singapore Exchange on April 24.
The property developer was responding to questions from shareholders and the Securities Investors Association (Singapore) ahead of its annual general meeting on April 29.
One of the questions was about shareholders getting at least 3 per cent per year on returns, after it was stated that “dividend payouts have been lagging for a long time.”
CDL said the company has enhanced its dividend policy in February and intends to declare ordinary cash dividends at least once annually, with a payout ratio of minimally 35 per cent based on profit after tax and minority interests.
It said this formal dividend policy enhances transparency and provides clarity and certainty for shareholders.
Shareholders asked how the CDL board arrived at 35 per cent, and not a higher payout ratio like 40 per cent or 50 per cent.
CDL said that the minimum payout ratio is a long-term commitment, and that it had carefully looked at past and projected financial performance and future cash flows, among other factors, to arrive at 35 per cent.
“Going forward, (the company) will continue to assess the scope for higher payouts in the context of its financial position, investment pipeline and overall capital allocation priorities,” CDL said.
CDL had upped dividends to 28 cents in FY2025, an increase from the 10 cents per share in FY2024, thanks to improved performance.
“While dividend yield may vary with market conditions and be impacted by share price movements and macroeconomic uncertainties, CDL’s focus remains on delivering sustainable shareholder returns,” it said.
CDL also said it will “continue to exercise prudence in its dividend distribution” to shareholders, while also considering the possibility of rebalancing the dividend between the interim and final payouts.
Shareholders also asked about the outlook for properties in Singapore and London.
They asked how CDL assesses current market conditions in Singapore and if there could be a slowdown.
CDL said: “Demand for Singapore’s private residential market is expected to remain resilient, though sales volumes may moderate given fewer launches this year.”
It added that private home prices are likely to remain stable with modest growth, supported by relatively lower interest rates, stable employment, a strong homeownership culture as well as Singapore’s position as a global hub.
Potential risks that may affect market sentiment include the Middle East conflict, interest rate volatility, geopolitical developments and policy changes, CDL said, which could dampen demand and price growth.
It remains “cautiously optimistic”, with recent new launches such as Newport Residences in January, which is now 76 per cent sold.
“With a diversified pipeline spanning executive condominiums, mid-tier and high-end segments, the Group is well-positioned to capture demand across market cycles,” CDL said.
It also commented on its 35 per cent stake in First Sponsor Group, a Singapore-listed mixed property developer and financier.
CDL noted that the developer is thinly traded – meaning it has low trading volume – and has limited daily liquidity, and that CDL will continue to evaluate its shareholding in the firm in a holistic manner alongside other considerations.
Shareholders also asked about CDL’s purchase of a 706-room Holiday Inn along Kensington High Street in London, near Copthorne Tara Hotel London Kensington.
CDL said its new hotel strengthens the Group’s presence in Central London, with the hotel achieving high occupancy rates of over 95 per cent.
“Together with the adjoining Copthorne Tara, the Group now controls two of the largest freehold sites in this highly sought-after precinct. The sites, whether on their own or amalgamated, offer significant long-term redevelopment potential,” it said.
Shareholders also wanted to know if CDL would monetise or spin off assets in its living sector portfolio, which include private rented sector apartments and purpose-built student accommodation across Singapore, Japan, the UK and Australia.
CDL said that potential options include divestments to third parties, seeding assets into existing platforms or new fund management initiatives. It can also hold the assets for longer-term potential.
“The timing will depend on market conditions, asset readiness and capital efficiency,” it said.
In FY 2025, CDL had achieved around $2 billion in contracted divestments.
It said it will not provide a standalone annual divestment target going forward, but that it has adopted a multi-year approach.
“As part of its proactive portfolio management, the Group regularly reviews its global asset portfolio and has identified a pipeline of assets across geographies and asset classes for potential divestment, including its legacy UK development land bank,” CDL said.
CDL was trading down by 1.6 per cent at $8.51, at around 3.15pm on April 24.
