CapitaLand Investment (SGX:9CI)’s share price slumped by as much as 8.5%, or S$0.27, to S$2.90 in early trading on 11 Feb 2026, after closing at S$3.17 on Tuesday 10 Feb. This was off the back of CLI reporting a headline net loss of S$142 million for 2H2025. In explaining the loss, CLI noted a challenging and uncertain macroeconomic backdrop in 2025.
Here, we review CLI’s financial performance, weigh in on the sustainability of its dividend, as well as offer some views on the merger rumours surrounding the company.
Financial overview
CLI recorded stronger operating PATMI of S$539 million for FY2025, up 6% YoY from S$510 million in FY2024.
CLI’s fund platform continued to scale, with funds under management growing 7% to $125 billion as at end 2025, supported by positive fundraising momentum as total equity raised almost doubled to $6.5 billion.
The improved Operating PATMI was driven by higher contributions from the listed funds business, lower interest costs and reduced operating expenses. These were partially offset by growth-related expenses to scale the private funds and lodging management business, as well as lower contributions following asset divestments.
Total PATMI for FY2025 was $145 million compared to $479 million in FY2024, mainly due to lower portfolio gains and higher revaluation losses on the Group’s China portfolio, reflecting continued market softness.
Meanwhile, total revenue was stable at $2,133 million for FY 2025, with higher fee-related revenue earnings, offset by lower contributions from the real estate investment business (REIB) post-divestments.
Net asset value fell nearly 8% from $2.72 to $2.52 per share.
Is the dividend sustainable
CLI has an operating PATMI of $539m. The operating PATMI is insufficient to cover the dividend of 12 cents a year or $599 million. Another reference point is its operating cashflow of $935m (down from $1,002m a year ago). However, we think the operating PATMI is a better reference point as a profit indicator.
Therefore, CLI needs to recycle assets to cover the dividends. However, it has not met its asset recycling target in part due to a large chunk of assets in China which they are facing downwards revaluation.
Interest coverage ratio is decent at 4.2x as compared to 3.7x a year ago. Funding costs has come down from 4.4% to 3.9%, however there should be room for it to reduce further, especially for Singapore funded costs. This means that from a capital management perspective, CLI has headroom to acquire more debt.
Growth trajectory for CLI
As the interest rate environment becomes more favourable, CLI expects transaction momentum to remain positive.
CLI intends to evaluate opportunities to expand and grow organically, while pursuing new opportunities, including new REIT listings, that will strengthen earnings resilience.
CLI expects to see continued strong investor take-up for CLI’s private funds, with sustained demand and interest for its established and thematic strategies where CLI has deep operational capabilities, supported by structural tailwinds.
Building on the positive fundraising momentum, CLI intends to continue to scale third-party capital and strengthen its resilient recurring fee base as it deepens its position as a partner of choice for investors.
Addressing the rumours
CLI’s CEO, Lee Chee Koon, said at a recent briefing that CLI is not pursuing merger and acquisition (M&A) opportunities just for growth. This comes amid rumours of a potential merger between CapitaLand and Mapletree Investments. While not naming Mapletree directly, Lee said any M&A deal “must make strategic sense”.
CLI’s CEO also said that “If it’s not accretive, it doesn’t make sense, it doesn’t build long term capabilities that can allow us to drive new funds capabilities (and) drive ROE (return on equity), it’s going to be very difficult for us to stand in front of our investors to explain why we want to do a certain transaction”.
He also said “We want to do good deals that really help to build the long-term capabilities for the company that can drive the share price”.
He also confirmed that CLI Is actively looking at deals as he conceded that CLI needs M&A to meet its target of growing its funds under management to S$200 billion by 2028.
Whats the play – Our take?
There are countless analyst reports as well as news articles speculating on a potential deal with various possible plays and outcomes as well as opinions on the implications for the REIT sector.
Here is our speculative take – Mapletree Investments takes Capitaland Investment private. The combined entity will split into a fund management platform and a development platform, both 100% owned by Temasek.
The impact on the various existing listed REITs would be minimal. We think there will not be mergers of any existing REITs and there would be enough assets pipeline in the sponsor to support any growth in the REIT.
Therefore we opine that the only play on the table is a CLI delisting.
Amongst the many reasons, we think one additional reason for CLI to be a potential delisting target is that it needs time to turnaround rather than be subject to quarterly scrutiny as a listed company.
CLI currently trades at a net debt to equity of 0.43x and has noted that it has financial flexibility to support investments and growth with a debt headroom of $6.4 billion based on a net debt to equity ratio of 0.90x.
CLI currently trades at a share price of $2.90 with a market capitalisation of approximately $15b. The valuation is approximately 1.15x book and 16x operating cashflow.
Looking very simply at one peer in the region, ESR was taken private at approx. HK$55.2 billion / US$7.1 billion. The offer price was HK$13 per share when its net tangible asset value was at HK$4.35. Operating cashflow was US$0.35M, valuing the deal at approximately 20x operating cashflow.
In our opinion, the ESR deal was a good deal for the minority shareholders. While we do not expect a potential take-private of CLI to receive a similar valuation, at least this is an indicator that CLI’s current valuation has some upside, especially if it executes a turnaround and further scales its asset and fund under management platform.
At the end of the day, although the possibility of a take private remains uncertain, there is a possibility for institutional buying to lead to a rebound in the short term as CLI is a flavor that institutions are interested in.
Join our free webinar session to find out how we identify and select the best dividend-paying stocks. Register now!
