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Gaining a Deeper Understanding of CapitaLand’s Business Empire

CapitaLand Ltd (SGX: C31) is a sprawling real estate behemoth with property developments and investments in multiple countries in Asia. It is an owner and manager of a global portfolio worth over S$103 billion as of 3 March 2019 comprising integrated developments, shopping malls, lodging, offices, residences, real estate investment trusts, and funds.

As with any large conglomerate, there are many moving parts to review and analyse, and this can consume significant time and effort. The key is to zoom in on the sections that will provide a broad overview and understanding of the group’s exposure and operations, then take time to drill down into the details at a later stage.

Here is a brief summary of CapitaLand’s business, described using the company’s AUM breakdown in a pie chart.

Geographic exposure

Source: CapitaLand’s Q1 2019 Presentation Slides

CapitaLand has significant geographic exposure to several different markets. China forms the bulk of its assets under management (AUM) at S$103.5 billion, taking up 49%, or around S$50.7 billion. Singapore comes next at 29% of AUM, or around S$30 billion. Other developed markets includes countries such as the USA, Japan, Australia, and Germany, and this takes up 12% of AUM, or around S$12.4 billion. Finally, other emerging markets, which includes countries such as Malaysia, Africa, and Indonesia, takes up the remaining 10% of AUM, or S$10.3 billion.

Property types

A more interesting diagram shows us the different types of properties in which CapitaLand is involved.

Source: CapitaLand’s 1Q 2019 Presentation Slides

Retail makes up the bulk of CapitaLand’s AUM, at 38%, or S$39.3 billion. This consists of 17 retail malls in Singapore and 7 malls in Malaysia (as of 31 March 2019). In addition, JEWEL Changi Airport was successfully opened on 17 April 2019 with more than 98% committed occupancy. The group also owns 5 malls in Japan and 43 malls in China, with another 5 malls slated to open in 2019 within China.

Lodging comes in next at 30% of total AUM, or S$31 billion. This consists of serviced business hotels, and serviced residences. As of 12 April 2019, CapitaLand had a total of 677 properties in its lodging division, with the total number of units at 101,500. These spanned a broad range of countries such as Singapore, North Asia, Australia, Europe, the Gulf Region, Africa, and the USA.

Commercial properties make up 22% of AUM at S$22.8 billion. This consists of an office portfolio in Singapore, a small commercial portfolio in Vietnam, and 24 commercial projects in 11 cities in China.

Finally, residential takes up the remaining 10% of AUM, or S$10.3 billion. These include residential project launches in Singapore, Malaysia, and Indonesia as well as in the cities of Ho Chi Minh and Hanoi in Vietnam. The group also launched two residential properties during Q1 2019 in the cities of Xi’an and Chengdu in China with high sell-through rates.

Digging deeper

Investors should now have a broad understanding of CapitaLand’s huge property empire, so watch out for future articles, in which I will be drilling deeper into various aspects.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of CapitaLand Ltd. Motley Fool Singapore contributor Royston Yang does not own shares in any of the companies mentioned.