A Rollercoaster Year for CDL
City Developments Limited (CDL) (SGX:C09) has had a tumultuous year. Beyond financial struggles, the company is now embroiled in a high-stakes leadership battle that has sent shockwaves through Singapore’s corporate landscape.
The power struggle between CDL’s executive chairman, Kwek Leng Beng, and his son, CEO Sherman Kwek, has turned into an all-out boardroom war, raising concerns about the company’s stability and strategic direction.
Adding fuel to the fire, CDL’s financials are under pressure. Revenue fell 33.8% to S$3.3 billion in FY2024, while PATMI (net profit after tax and non-controlling interest) declined 36.6% to S$201.3 million. This was, however, a much better result compared to FY2023’s 75.3% drop.
With a leadership crisis unfolding at the top and mounting financial concerns, CDL is at a turning point. Can the company navigate its internal conflict and market challenges, or will it succumb to instability?
The Battle for Control: A Timeline of CDL’s Leadership Feud
2018: The Rise of Sherman Kwek
- Sherman Kwek is appointed Group CEO on 1 January 2018 with CDL’s share price peaking at S$13.
- Global macroeconomic shifts lead to a slowdown in CDL’s property development business.
2020: The S$1.9 Billion Blow
CDL suffers a massive S$1.9 billion write-down on its Chinese investment, raising concerns about Sherman’s leadership.
2023: UK Investments & 75% Profit Collapse
- CDL’s overall net profit after tax and non-controlling interest (PATMI) plunged 75% in FY2023, from S$1.3 billion to S$317 million, due to impairments on UK property investments, higher interest rates, and fair value losses.
- Despite a S$1 billion boost from the Piermont Grand EC project and a lucrative Tokyo land sale, market sentiment remains weak.
- CDL’s net gearing increases from 51% to 61%, reflecting a more leveraged balance sheet.
26 February 2025: The Breaking Point
- CDL unexpectedly cancels its earnings briefing on the morning of the announcement and announces a trading halt, triggering speculation.
- Executive Chairman Kwek Leng Beng moves to remove his son Sherman as CEO, citing poor investment decisions.
- Sherman publicly fights back, stating: “It is incredibly disappointing that our chairman and a minority of the CDL board have decided to take these extreme actions…“
- CDL later confirms that Sherman Kwek will remain as Group CEO for now, but the battle for control is far from over.
27 February 2025: Sherman Kwek’s Statement
- Sherman Kwek publicly responds to the boardroom dispute, implying that the rift stemmed from concerns over Catherine Wu, an adviser to Kwek Leng Beng who has “enormous influence” over the Chairman’s decision.
- He describes the situation as “a corporate governance issue” and this led the board, with legal advice, to pass resolutions on Feb 21 to terminate Catherine Wu’s advisory agreement with M&C and affirm that she holds no authority to influence CDL and M&C’s directors, management, or staff.
- The dispute then escalated, leading to Kwek Leng Beng’s attempt to remove Sherman as CEO.
28 February 2025: The Other Side of the Story
- Kwek Leng Beng refutes Sherman Kwek’s claim that there was no attempt to remove him, stating that Sherman is “missing the point,” and that “Protecting good governance, including the office of the executive chairman, and not me as an individual, is critical. Stripping away any meaningful authority of the executive chairman is a coup.”
- Philip Yeo, CDL’s board member, also weighed in on the boardroom dispute, emphasising that the conflict is about governance and accountability, not personal grievances.
Since Sherman took over as CEO in 2018, CDL’s share price has fallen by 60% (excluding dividends), reflecting investor concerns over leadership decisions and market challenges. To be fair, UOL’s share price has also fallen by approximately 41% during the same period, highlighting the difficult macroeconomic conditions impacting the property sector as a whole.
While CDL made strategic acquisitions—such as St Katharine Docks in London and PRS assets in Tokyo and Osaka—the company struggled with high financing costs, construction delays, weak global office & REIT market performance and China’s ongoing property crisis.
Despite these challenges, CDL’s investment properties revenue jumped 11.1%, fuelled by acquisitions. The hospitality arm also grew 8.2%, benefiting from the Sofitel Brisbane Central acquisition and Hilton Paris Opéra addition.
On the financial front, CDL maintains S$2.8 billion in cash reserves, though net gearing has climbed to 69% (from 61%), signalling a more leveraged position. Shareholders can expect a total dividend of 10.0 cents per share, down from 12.0 cents in FY 2023.
CDL’s Property Game: What’s Selling & What’s Next
In FY2024, Singapore residential sales totaled S$2.97 billion, with 1,489 units sold, more than double FY2023’s 730 units.
Key Projects & Sales Performance:
- Lumina Grand (512-unit EC) – 89% sold
- Kassia (276 units) – 71% sold
- Norwood Grand (348 units) – 84% sold
- Union Square Residences (366 units) – 31% sold
Looking ahead, CDL launched The Orie (777 units) in Jan 2025, which is already 88% sold! Next up? The Zion Road (Parcel A) mixed-use project and the ultra-luxurious Newport Residences.
Expanding in China: A Contrarian Move?
CDL is re-entering the China market, acquiring a rare mixed-use site in Shanghai’s Xintiandi area for RMB 8.94 billion (S$1.66 billion). Sales are expected to begin in 2026.
Since November 2024, CDL’s management has expressed interest in China, citing attractive property valuations. While this is a high-risk, contrarian move, the company is targeting Shanghai, Suzhou, and Shenzhen, cities known for more resilient housing prices.
Hotels & Rentals: The Money Makers
CDL’s hospitality segment remains a bright spot, with global travel demand driving performance.
- Hilton Paris Opéra (S$350.2 million acquisition) — A star performer during the Paris 2024 Olympics
- M Social Phuket — Opened in June 2024, benefiting from peak season travel
- The Mayfair Hotel Christchurch — CDL’s return to New Zealand, acquired for S$24.5 million
Revenue per available room (RevPAR) rose 2.6% to S$172.5 across CDL’s hotel portfolio, with Europe and Asia leading the charge.
Meanwhile, CDL is strengthening its recurring income streams:
- UK PRS Portfolio: First co-living venture in London with The Yardhouse (209 units, S$148.6 million)
- Japan PRS Portfolio: 40 assets, 2,246 units, 95% occupancy
- Student Housing (UK): 6 properties, over 90% occupancy
Office & Retail: Holding Steady Amid Challenges
CDL’s Singapore office portfolio remains strong, boasting a solid 97.7% committed occupancy, exceeding the island-wide average of 89.4%. Republic Plaza is nearly full at 99.3%, while South Beach has hit 94.4%.
Retail assets are thriving, too — with a 98% occupancy in Singapore, beating the national average of 93.8%. City Square Mall is undergoing a facelift, but remains 95.7% occupied in unaffected areas.
The challenge? China and the UK. CDL’s China office portfolio sits at a lower 58.6% occupancy, and its UK commercial portfolio lags at 79.5%, affected by tenant exits.
Divestments: Over S$600 Million in Sales
To strengthen its balance sheet, CDL made strategic asset sales to recycle capital and manage portfolio, including:
- Hong Leong City Center (Suzhou): RMB 1.01 billion (S$187.4 million)
- Ransome’s Wharf (London): £69.08 million (S$115.3 million)
- CDL sold multiple industrial and commercial properties (Singapore) including Cideco Industrial Complex and Strata units at Citilink Warehouse Complex, Cititech Industrial Building, Fortune Centre, and Sunshine Plaza
Verdict: A Company at a Crossroads
CDL faces two major battles — a boardroom power struggle and global economic headwinds. While its property and hospitality segments show resilience, investor confidence is shaken by leadership uncertainty.
The contrarian bet on China’s property market could pay off long-term, but investors shouldn’t expect immediate results. Meanwhile, Kwek Leng Beng’s attempt to remove Sherman Kwek has raised concerns over CDL’s strategic direction.
💡 Will CDL push forward with its restructuring plans, or will the leadership feud derail progress?
One thing is certain: this saga is far from over.
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