City Development Limited (“CDL”) plans to issue new 5 years senior unsecured fixed rate notes at the final price guidance (“FPG”) of 2.40%. The new bonds are expected to be issued on 2 December 2025 and mature on 2 December 2030. Both the issuer and bonds are expected to be unrated. The net proceeds from the issuance will be used for general corporate and working capital purposes and refinancing existing borrowing.
CDL is one of Singapore’s leading property developers, that operates in four distinct business segments: Property Development, Hotel Operations, Investment Properties, and Others. CDL operates on a global footprint covering 168 locations in 29 countries and regions as of 30 September 2025.
In the first half of 2025 (“1H2025”), CDL recorded revenue of S$1.7 billion . This represents a year-on-year (YoY) increase of 8.0%, on the back of divestments of its UK property (Ransome’s Wharf Site) and its China office component of Suzhou Hong Leong City Centre. CDL’s profit before tax (“PBT”) declined 10% YoY to S$139.9 million owing to a foreign exchange loss of S$63.1 million . Excluding this, PBT would stand at S$203 million, up 30.6% YoY instead. Alongside higher contributions from property development projects, including full profit recognition of its completed JV project, Copen Grand EC, profit after tax and minority interests (“PATMI) rose 3.9% YoY to S$91.2 million .
CDL’s property development segment remains its main profit driver, with revenue rising 24.3% YoY to S$583 (34.3% of total revenue) million in 1H2025. Meanwhile PBT for this segment came in at S$152 million. Fully sold JV projects contributed to this segment’s PBT. In its third quarter (“3Q2025”) update, CDL management notes strong demand and robust sales for its Singapore residential properties on the back of lower interest rates and new launches.
CDL’s hotel operations was challenged for 1H2025, with PBT turning negative to S$(84) million from 1H24’s S$23 million . This was due to lower Revenue per available room (“RevPAR”) experienced across Singapore and London alongside financing and inflationary cost pressures. In its 3Q2025 update, CDL continues to witness softer hotel operating metrics with lower occupancy and RevPAR rates in Asia offset by stronger performances seen in the rest of UK and Europe.
For 1H2025, the property developer’s investment properties segment also saw lower PBT of S$76 million due to lower divestment gains and higher net financing costs.
In its 3Q2025 update, CDL’s office and retail portfolios saw strong occupancy rates of 96+% while achieving healthy rental reversions and strong tenant demand. Private rental demand for its overseas operations in UK, Japan, and Australia remain steady.
CDL’s others segment round things off with a negative PBT of S$(4) million on the back of net foreign exchange losses and lower fair value gains on financial instruments.
CDL reported a net gearing ratio of 69% as of 30 September 2025. Do note that this metric includes fair value on investment properties following its acquisition of a mixed development sit in Shanghai and the GLS acquisition at Lakeside Drive. Interest coverage ratio is stable at 4.0x .
CDL’s net gearing ratio is higher, while its interest coverage ratio is lower as compared to UOL Group Limited and CapitaLand. Net gearing ratio remains stable, with the previous year’s figure of 70% representing a 100-bps decline.
As of 30 June 2025, CDL reported total borrowings of S$12.75 billion , with S$4.75 billion coming due in one year or less . Its average borrowing cost of 4.0% also declined from 1H2024’s figure of 4.4%. Do note that CDL does not report its total borrowings for 3Q2025. We believe that this is manageable if CDL maintains its positive operating cash flow (S$0.5 billion (excluding a one-off S$1.1 billion payment for the mixed-use development site in 1H2025, aided by a cash reserve of S$2.0 billion, supported by S$3.9 billion in cash and available undrawn committed bank facilities (as of 30 September 2025). CDL could also tap the debt market for further financing, if required.
Recommendations
Table
1: Peer comparison
Source: Bondsupermart,
iFAST Compilations.
Data as of 24 November
2025
*Yet to be issued
Overall, we think CDL’s credit profile is relatively stable with a manageable debt profile and interest coverage. At an FPG of 2.40%, CDL’s new senior unsecured issuance looks fairly priced with its similar tenor bonds which are mostly trading at a yield-to-maturity between 1.8-2.295%.
CDL’s new senior unsecured issuance is also trading at a rough 80 bp spread compared to a 5-year Singapore government debt security.
In our opinion, CDL’s new issuance trades more attractively relative to its peers similar - similar tenor bonds from CapitaLand (CAPLSP 3.800%26Jun2031 Corp and CAPLSP 2.900% 21Sep2032 Corp) and UOL (UOLSP 2.780% 15Jul2032 Corp) - which are currently trading around 2.1% - 2.26%. The lower yields from peers’ bonds are likely due to the issuers having better credit metrics than CDL. CapitaLand Treasury limited issuances are guaranteed by CapitaLand Limited. Do note that although the bonds are by the privatised development business of CapitaLand Group Pte Ltd, we are comparing CDL to the publicly listed company, CapitaLand Investment Limited.
In sum, we believe CDL’s new 5-year senior issuance is suitable for investors who are seeking a stable name with a solid market presence.
Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold NIL positions in the abovementioned securities.
