CapitaLand restructuring will enable faster growth and re-rating: PhillipCapital

PhillipCapital analyst Natalie Ong has maintained her ‘buy’ rating for CapitaLand with a higher target price of $4.38 from $3.75 previously following the company’s proposed restructuring and demerger of its investment-management business.

Under a proposed scheme of arrangement with CLA Real Estate Holdings, CapitaLand will consolidate its investment management platforms as well as its lodging business into CapitaLand Investment Management (CLIM), which will be listed on the Singapore Exchange (SGX), while its property development business with net asset value (NAV) of $6.1 billion will be decoupled and privatised.

Ong says she sees several merits in the scheme. “By decoupling its development operations from its stable fund management and mature investment property portfolio, we believe investors will benefit from the immediate realisation of the development assets at the 0.95 times book value offered, compared to CapitaLand’s historical 20-30% trading discounts to NAV,” she explains.

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