---
endpoint: analytics
pattern: Property
status: done
latency_ms: 189550
conversation_id: 8d30c5bc-9b5f-4f3d-9017-105bc4c65b30
citations: 15
created: 2026-05-31 21:41:56Z
---

# How does CapitaLand’s valuation compare to peers, and what justifies its premium/discount?

## CapitaLand Investment (CLI, SGX: 9CI) — Valuation vs. Peers

CapitaLand Investment is a hybrid Asian real-estate asset manager — a portfolio of listed CapitaLand REIT stakes, an Asia-wide private-fund business, on-balance-sheet investment properties, and a fund-management franchise. Because of that mixed structure, no single multiple captures the picture: the stock is valued on a **sum-of-the-parts (SOTP) basis**, with each leg benchmarked to its own peer set, and trades at a **~26% discount to RNAV** [2].

### 1. Where CLI trades today (CLSA primary research, Apr–May 2025)

| Metric | Value | Note |
|---|---|---|
| Last price | S$2.59–2.75 | Apr/May 2025 print; market cap ~US$10.5bn [8], [9] |
| CLSA target price | S$3.50 | Rating: Outperform (O-PF), unchanged since Oct-2023 [7], [9] |
| Implied upside to TP | +27% to +38% | [9] [3] |
| 2025CL PE | 13.7x | [8] |
| 2026CL PE | 12.6x | [8] |
| 2025CL P/B | 1.0x | [8] |
| 2025CL Dividend yield | 4.4% | [8] |
| 2025CL ROE | 7.1% | (2026CL: 7.5%) [8] |
| 2025CL Net debt/equity | 40.3% | down from 53.5% in FY24 [8] |

### 2. The SOTP — how each leg is valued and against which peers

CLSA's NAV/share bridge (Apr-2025):

| Component | Value (S$/sh) | % of GAV | Valuation method / peer basis |
|---|---|---|---|
| **Listed REITs (6 CapitaLand REITs)** | **1.54** | 31% | CLSA target prices for covered REITs; market prices for non-covered [14], [1] |
| **Fee business** | **1.55** | 31% | **15x EV/Ebitda on FY25CL EBITDA of S$528m — in line with the fund-manager peer historical trading average** [2], [1] |
| **Investment properties (on book)** | **0.90** | 18% | Latest revalued book value (i.e. **1.0x P/B**, no premium) [1] |
| **Stakes in unlisted/private funds** | **1.00** | 20% | Effective equity stake (book) [1] |
| Gross Asset Value | 4.99 | 100% | — |
| Less: adjusted net debt | (1.49) | | [2] |
| **NAV / share** | **3.50** | | — |
| Spot share price | 2.59 | | [2] |
| **Discount to NAV** | **~26%** | | [2] |

The Listed-REIT leg (1.54/sh) is itself a peer-pegged number — it embeds CICT, CLAR, CLAS, CLCT, CLINT and CLMT at their own market/CLSA prices [14].

### 3. Why a *premium* multiple is justified on the fee business (15x EV/EBITDA)

The **fee-management leg is the part that earns a true asset-manager multiple**. CLSA argues 15x EV/EBITDA is appropriate because:

- It is **in line with the fund-manager peer historical trading average** — the explicit anchor CLSA uses [1].
- The fee business is **capital-light, recurring, and growing**: 1Q25 fee income +3% YoY on a like-for-like basis, FUM stable at S$117bn, with active expansion into Japan DC, Tokyo lodging, Korea private credit, and Malaysia/Vietnam logistics [13], [12].
- Management is **explicitly shifting mix toward fees** — targeting REIB (real-estate investment business) contribution down to 30–40% of PATMI by 2028–2030 from 38% in 2024 [12]. As the fee mix rises, the blended multiple should rerate toward the fee-business multiple.

In other words, CLI's fee-arm peer is the global property-fund-manager universe (Blackstone, Brookfield, ESR-class names), not Singapore developers. Within that universe 15x EV/EBITDA is mid-of-the-road, not premium.

### 4. Why the overall stock trades at a *discount* to NAV (and to Singapore-market multiples)

The discount sits at the **investment-property and balance-sheet legs**, not at the fee leg. Three forces drive it:

1. **Sub-par ROE vs Singapore-market peers.** CLI's 2025CL ROE of 7.1% [8] is materially below the **Singapore-market average ROE of ~12% at 2.0x P/B** that CLSA shows in its Singapore strategy peer screen [15]. Property fund managers in DM trade at ~3.2x PB on ~15% ROE; Singapore at 2.0x / ~12% [15]. CLI at 1.0x P/B / 7% ROE sits well below — a **classic P/B-vs-ROE discount**: lower returns, lower multiple.
2. **On-balance-sheet investment properties earn low cash yields** and act as a drag on ROE; CLSA values these at book (P/B 1.0x) with no premium [1], [3]. Until CLI **divests these assets into its own REITs or private funds** (the so-called asset-recycling thesis), ROE stays subpar. The thesis is explicitly that "over time, this should also narrow its discount to RNAV" [3], [10].
3. **China exposure.** Roughly a third of CLI's assets are held in China, including S$47.6bn of RE AUM and ~S$3bn of China assets still on its balance sheet [11], [12]. China property weakness keeps cap rates high and exit liquidity thin. The recently-announced Retail China REIT (CLCR) is intended to ease this, but C-REITs are gearing-capped at 28.6% and barred from acquisitions in year-1, so execution will take time [12].
4. **Macro/rates overhang.** Elevated rates raise hurdle rates and slow asset recycling, the very mechanism that should narrow the RNAV discount [4]. CLI's own subsidiary REITs have seen gearing creep from ~30% (1Q22) to ~39% (1Q25) as cap rates re-priced [from balance-sheet trend].

### 5. What would close the discount (catalysts)

- **Rate pause / cuts** → faster recycling, listed REITs trade back above book, balance-sheet IPs can exit to REITs/private funds [11].
- **CLCR launch & follow-on China recycling** → reduces low-yielding on-book assets and grows fee FUM [12].
- **Lift in REIB mix** toward the 30–40% PATMI target → blended multiple rerates toward 15x fee-business multiple [12].
- **AUM growth from new mandates** (Japan DC, Korea private credit, ASEAN logistics) → compounds fee earnings without balance-sheet drag [13].

### 6. Bottom line

CLI trades at **~13–14x forward PE, 1.0x P/B, 4.4% yield and a ~26% discount to RNAV** [2], [8]. On a pure-peer basis:

- **Fee business is in line with global property-fund-manager peers** (15x EV/EBITDA — CLSA's stated peer-average anchor) [1].
- **On-balance-sheet investment properties are *not* given a premium** (carried at 1.0x book), and **stakes in private funds at 1.0x book** — both are why the headline P/B looks "cheap" vs the broader Singapore market (2.0x P/B at 12% ROE) [15].
- The discount is therefore *justified by structurally lower returns* on the property legs, not by a market mispricing of the asset-management franchise.

The bull case (CLSA O-PF, TP S$3.50, +27–38% upside) is essentially a **mix-shift trade**: as CLI moves capital from low-yielding IPs into the fee franchise, ROE rises, and the discount-to-RNAV gap compresses [3], [10]. Until interest rates fall and China exit liquidity recovers, expect the discount to persist [4].

---
**Sources**
[1] CapitaLand – O-PF (Launching China Reit) — CLSA, 18 Apr 2025 — Valuation Details paragraph
[2] CapitaLand – O-PF (Launching China Reit) — CLSA, 18 Apr 2025 — SOTP Table (NAV/share S$3.50, 26% discount)
[3] CapitaLand – O-PF (Launching China Reit) — CLSA, 18 Apr 2025 — Investment Thesis
[4] CapitaLand – O-PF (Launching China Reit) — CLSA, 18 Apr 2025 — Investment Risks
[5] CapitaLand – O-PF (Muted Start) — CLSA, 1 May 2025 — NAV Breakdown Table
[6] CapitaLand – O-PF (Muted Start) — CLSA, 1 May 2025 — Headline Valuation Table
[7] CapitaLand – O-PF (Muted Start) — CLSA, 1 May 2025 — Recommendation History
[8] CapitaLand – O-PF (Muted Start) — CLSA, 1 May 2025 — Financial Summary Table (PE/PB/Yield/ROE)
[9] CapitaLand – O-PF (Launching China Reit) — CLSA, 18 Apr 2025 — Target Price / Upside header
[10] CapitaLand – O-PF (Muted Start) — CLSA, 1 May 2025 — Investment Risks
[11] CapitaLand – O-PF (Muted Start) — CLSA, 1 May 2025 — Catalysts (China asset recycling)
[12] CapitaLand – O-PF (Launching China Reit) — CLSA, 18 Apr 2025 — CLCR Listing thesis
[13] CapitaLand – O-PF (Muted Start) — CLSA, 1 May 2025 — Headline ("Muted Start")
[14] CapitaLand – O-PF (Muted Start) — CLSA, 1 May 2025 — SOTP Listed REITs Table
[15] Singapore strategy (Strength in defence) — CLSA, 25 Jun 2025 — Country P/B vs ROE Table

## Citations

- [1] **607956249LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956249LinqAlpha.PDF>
- [2] **607956249LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956249LinqAlpha.PDF>
- [3] **607956249LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956249LinqAlpha.PDF>
- [4] **607956249LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956249LinqAlpha.PDF>
- [5] **607957865LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957865LinqAlpha.PDF>
- [6] **607957865LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957865LinqAlpha.PDF>
- [7] **607957865LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957865LinqAlpha.PDF>
- [8] **607957865LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957865LinqAlpha.PDF>
- [9] **607957865LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957865LinqAlpha.PDF>
- [10] **607957865LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957865LinqAlpha.PDF>
- [11] **607957865LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957865LinqAlpha.PDF>
- [12] **607956249LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956249LinqAlpha.PDF>
- [13] **607957865LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957865LinqAlpha.PDF>
- [14] **607957865LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957865LinqAlpha.PDF>
- [15] **607962766LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962766LinqAlpha.PDF>

