CapitaLand Investment Posts SG$142M Loss on China Portfolio Revaluation
CapitaLand Investment posts SG$142M loss as China portfolio revaluation losses hit SG$439M. Five-year cumulative write-downs reach SG$1.6B, signaling structural decline in Asian real estate markets.
CapitaLand Investment (CLI), one of Asia's largest real estate investment managers, reported a net loss of SG$142 million (US$105 million) for the second half of FY2025, reversing a SG$148 million (US$110 million) profit recorded in the same period a year earlier. The primary driver was SG$439 million (~US$326 million) in full-year, non-cash revaluation losses on its China portfolio.
China Write-Downs Reach SG$1.6 Billion Over Five Years
CLI's China assets lost 5% of their value in FY2025, equivalent to SG$545 million (US$405 million), with offices and business parks recording the steepest declines. Full-year revaluation losses surged 68.2% from SG$261 million (US$194 million) in 2024.
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At the FY2025 earnings briefing on February 11, 2026, Group CFO Paul Tham confirmed that cumulative China write-downs had reached approximately SG$1.6 billion (~US$1.2 billion) over five years, averaging a 12% annual decrease. Specific assets reflected the trend: Shanghai's Innov Center fell from 3.1 billion yuan to 2.9 billion yuan, and CapitaMall Westgate in Wuhan dropped from 1.9 billion yuan to 1.7 billion yuan.
One asset moved in the opposite direction. The Shanghai Zhuanqiao Data Centre rose from 2.9 billion yuan to 3.2 billion yuan, highlighting a clear split between data infrastructure and traditional commercial property.
CLI's subsidiary, CapitaLand China Trust, reported FY2025 net property income down 9.4% to approximately SG$159 million (~US$118 million), with distribution per unit falling 14.7% to 4.82 Singapore cents. Logistics assets recorded rental reversions of -24.5%.
China's Property Sector Continues Structural Decline
China's broader property market has deteriorated since the government introduced "three red lines" regulations in 2020 to curb excessive developer borrowing. The policy triggered approximately US$130 billion in developer defaults, with China Evergrande ordered to liquidate in 2024 and Country Garden completing offshore debt restructuring.
Property investment in China fell 17.2% in 2025, while home sales by floor area declined 8.7%. Annual housing demand is forecast to average approximately 800 million square meters through 2040, down from 1.6 billion square meters in 2021. An estimated 80% of China's developers and construction firms could exit the market in coming years as the industry contracts.
A 2024 AXA Investment report warned that "intricate and tight interconnections between financial institutions, the real estate sector, and local and central governments create a fragile environment," where "even a minor disturbance could potentially trigger a chain reaction, destabilizing the entire banking system." China's central government has refinanced approximately US$1.4 trillion in local government debt over the past year, reflecting the fiscal scale of the sector's collapse.
CLI Pivots to Asset-Light Strategy Amid Operating Profit Rebound
Despite headline losses, CLI's H2 FY2025 operating profit rose 30% to SG$279 million (US$207 million), and full-year operating profit grew 6% to SG$539 million (US$400 million). UOB Kay Hian maintained a "buy" rating and raised its target price to SG$4.05 (US$3.01) from SG$3.49 (US$2.59), noting that revaluation losses had masked "resilient operating performance."
CLI's funds under management reached SG$125 billion (US$93 billion) by end-2025, with a stated target of SG$200 billion (US$149 billion) by 2028. The company is executing a capital recycling strategy in China, including the divestment of CapitaMall Yuhuating to CapitaLand Commercial C-REIT and a second C-REIT targeting offices and hospitality planned for Q2/Q3 2026.
CLI's net debt-to-equity stands at 0.43x, with SG$6.4 billion (US$4.8 billion) in debt headroom. The company has committed to a minimum distribution per stapled security of SG$0.12 (US$0.09) for 2026.
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