CapitaLand banks on asset recycling to drive returns

It is in the process of divesting close to $2.4b of assets.

CapitaLand seems to be using the asset recycling strategy to drive returns, analysts from DBS Group Research said.

According to lead analyst Derek Tan, whilst CapitaLand has ample cash resources that can be deployed opportunistically, asset recycling remains a key strategy to optimise portfolio returns.

The analyst stated that capitaLand and its real estate investment trusts (REITs) are in the process of divesting close to $2.4b of assets and will be redeploying the proceeds into S$2b worth of income-producing properties, and have committed another $1.6b to the redevelopment of Golden Shoe car park.

"We believe that the group’s strategy of optimising portfolio returns through active management of its portfolio will help to boost ROE towards the management’s longer-term target of around 8%," Tan noted.