CapitaLand Q1 update: what’s the business outlook for the rest of 2020?
The property group said in a new update that its financial performance for the year will be adversely impacted.
Singapore real estate conglomerate CapitaLand said in a Q1 2020 financial update posted on Monday 04 May 2020 that its operating performance across all its markets have been ‘affected in various degrees’ by social distancing, travel and commercial restrictions.
The group said that the impact was primarily concentrated within its residential, retail and lodging businesses.
Meanwhile, offices, business parks, logistics, multifamily properties and fund management business have ‘remained relatively resilient’ during the quarter.
Following the update, CapitaLand’s share price opened 2.1% higher on Tuesday 05 May. Shares are trading at S$2.91 as at 13:30 on Tuesday, based on IG data.
IG is a world-leading online trading and investments provider for thousands of financial markets. With CFDs, you can buy long or sell short on CapitaLand shares depending on whether you think prices will rise or fall. Start today by opening an IG account.
Singapore: lower residential and retail traffic
In Singapore, there has been lower footfall in residential sales offices due to increased social distancing. All sales offices were also closed with the start of Singapore’s so-called ‘circuit breaker’ measures on 07 April 2020.
On the retail front, an estimated 25% of tenants categorised as essential services remained open during this ‘circuit breaker’ period. Shopper traffic for the first quarter is down 10.8% on a year-on-year basis.
In Singapore, there remained a healthy level of committed occupancy in office and business space assets in the first quarter.
On 05 May 2020, the group announced that 79 Robinson Road, a new commercial building located in Singapore’s Central Business District, has received its Temporary Occupation Permit (TOP) on 28 April 2020. The development is jointly owned by CapitaLand, Mitsui & Co., Ltd. and Tokyo Tatemono Co., Ltd.
China: on the road to recovery
Towards the end of the first quarter, China – the group’s largest market, ended its nationwide lockdown. On this note, CapitaLand’s trading results have begun to recover, with improved residential sales and shopper traffic reported in March 2020.
Residential sales offices reopened progressively in March. Sales of close to RMB900 million were registered in the first quarter of 2020, more than the combined value of January and February.
On the retail front, all 15 malls which were closed during the nationwide lockdown in February 2020 have reopened. As of 19 April 2020, more than 85% of tenants are back in operation. Q1 2020 shopper traffic is 52% lower on a year-on-year basis.
In terms of office and business space performance, approximately 95% of CapitaLand’s office tenants and 86% of business space tenants have resumed work since March.
Are you bullish or bearish on CapitaLand? Either way, you can buy long or sell short on CapitaLand shares and other Singapore-listed stocks using CFDs and other instruments offered on IG's world-leading trading platform. Start today by opening an IG account.
Business outlook for the rest of 2020
‘While our financial position continues to be healthy, our business activities have been affected. This will in turn have an adverse impact on our financial performance for the year, potentially including but not limited to our profitability, credit metrics, the valuation of our investment properties and capital recycling,’ the group said.
It added that it expects retail and lodging businesses to continue facing headwinds in the second quarter of 2020 as regulations on social distancing and travel will remain tight.
‘Overall, we expect our diversified portfolio to stay resilient, although the extent of the financial impact on the group for 2020 will depend on the severity and length of the economic downturn and the speed and strength of the subsequent recovery.
The group will report details in its 1H 2020 financial results.
How to trade Singapore stocks with IG
Looking to trade CapitaLand shares and other Straits Times Index (STI Index) stocks? Open a live or demo account with IG and buy (long) or sell (short) the asset using derivatives like CFDs in a few easy steps:
- Create an IG Trading Account or log in to your existing account
- Enter <company name> or <ticket code> in the search bar and select it
- Choose your position size
- Click on ‘buy’ or ‘sell’ in the deal ticket
- Confirm the trade
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Act on share opportunities today
Go long or short on thousands of international stocks with CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets