Is it Time to Buy CapitaLandInvest (SGX:9CI), The King of REITs Now?
Last Updated on 4 weeks ago by Antony C.
CapitaLandInvest (CLI) is listed in SGX with the ticker symbol 9CI.SI, it is currently has a share price of SGD$2.520. It is arguably the most popular REIT that almost all Singapore investors may have heard of.
At this price, CLI is valued at a price-to-book ratio of 0.928 and a trailing distribution yield of 4.76%.
With the current valuation, would I invest in it?
Let’s go through it using my 7 steps REITS dividend investing assessment and see if it is a dividend stock that is worth considering.
- Portfolio Occupancy Performance
- Diversified Tenant Base
- Dividend Yield
- Gearing Ratio or Aggregate Leverage Ratio
- Weighted Average Lease Expiry (WALE)
- Return of Equity (ROE)
- Price-to-Book Ratio
…and extra step, MOAT assessment.
Disclaimer: I may or may not have invest in any of the stocks/REITs/ETFs, what’s listed here is only for entertainment purpose only and it should never be used as any form of investment advice. Past performance ≠ future results. While I’ve been investing for +15 years, I am still learning, this is my stock investment diary, and I wish to share what I learn during my investment journey so you may learn from both my success and mistakes. Enjoy!
Business Background
CapitaLand Investment Industrial (CLI) is one of the Asia’s leading listed global real asset managers established from a successful demerger from the development business of CapitaLand Limited (“CapitaLand” or the “Parent Group”) and have successfully listed on SGX-ST in Sep 2021.
The Group’s funds under management (“FUM”) is well-diversified across asset classes, namely, integrated developments, retail, office, lodging and new economy sectors such as business parks, industrial, logistics and data centres.
Key Information
S$117.1 Billion
AUM
45
Properties Globally
>92%
Occupancy Rate
Business Segments
1. Portfolio Occupancy Performance
Check for: More than 90% Occupancy Rate
Looking at the latest financial report. CapitaLand Investment’s (CLI) portfolio is currently at 92% for overall occupancy across the all the regions.
- Southeast Asia: 92% to 100% occupancy rate
- India: 89% occupancy rate
- China: 79% to 95% occupancy rate
- Australia, Japan and Korea: 85% to 94% occupancy rate
- UK & Europe and the USA: 89% to 96% occupancy rate
Looking at the occupancy rate, I am really impressed with it’s overall occupancy rate of more than 90%.
While some of the areas do have a decrease in occupancy rate, the impact is minor and most of the other areas have a massive positive increase in the occupancy rate, this is especially true for Malaysia and India.
My Opinion: Pass
2. Diversified Tenant Base
Check for: No tenant is more than 10% of gross rental income
Time to time, tenant leave or may face financial difficulties that may impact the income of our REITs, thus ensuring that no tenant is more than 10% of gross rental income is important.
Having a large and diversified tenant based ensure that the REIT is stable and will not be too greatly impacted by any one of it’s tenant.
With the way CapitaLand Investment’s (CLI) is structured, it have one of the most diversified portfolio:
- Number of Properties: over 1,000 properties
- Number of Cites: 270 cities
Looking at how diversified the list of tenant, properties and industry, I am really happy with it, and not just focusing all your eggs in 1 basket is probably one of the key advantages that CLI have.
My Opinion: Pass
3. Dividend Yield
Check for: More than a 4.5% dividend yield
Researching the data with financial tools for SGX listed securities and stocks. CapitaLand Investment’s (CLI) is offering:
- Dividend yield: 4.76%
- 5 year average dividend yield: NA
| Year | Dividend (TTM) SGD |
|---|---|
| 2025 (ongoing) | 0.033 |
| 2024 | 0.130 |
| 2023 | 0.107 |
| 2022 | 0.056 |
| 2021 | 0.118 |
| 2020 | 0.061 |
Calculating the dividend growth rate for the past few years, we can see that CapitaLand Investment’s (CLI) is doing pretty well in growing the dividend. For dividend investing, I’ll prefer if they will pay a stable (and maybe, growing) dividend that is growing.
- 4 Years Dividend Yield Growth (from 2021): 10.17% for the past few years.
Looking at the distribution history, the dividend payment is quite stable, and the main reason why it seems not growing between the year 2022 is probably due to the pandemic.
My Opinion: Pass
4. Gearing Ratio or Aggregate Leverage Ratio
Check for: Gearing ratio of less than 45%
Gearing ratio or aggregate leverage ratio determines if the REIT is currently over-leverage. An over leverage REIT will not be able to buy more assets and grow their portfolio. This is one of the key metrics for a healthy balance sheet for REITs.
A quick check on the financials for CapitaLand Investment’s (CLI) let’s take a look at it’s gearing ratio and weighted average tenor of debt.
- Gearing ratio: 39%
- Weighted average tenor of debt: 3.6 years.
Looking at the gearing ratio, I can see that it is pretty healthy, and with a low gearing ratio, it can have the option to grow it’s assets when opportunity comes in the future.
My Opinion: Pass
5. Weighted Average Lease Expiry (WALE)
Check for: Acceptable WALE of over 2.5 years
Weighted Average Lease Expiry (WALE) is the key metric if we want to look at REITs stability. Higher WALE means higher predictability of the future rental income of the REITs.
A quick check on the financials for CapitaLand Investment’s (CLI) shows that it is showing a healthy WALE of >3 years.
Honestly, it is really hard to get the actual WALE of CapitaLand Investment’s (CLI), so instead, I look at the the REITs under the management of CapitaLand Investment’s (CLI) and find that the overall is pretty healthy which I am happy with it.
My Opinion: Pass
6. High Return Of Equity (ROE)
Check for: More than 5% ROE
Return on Equity (ROE) is often used to measure the management’s ability to make money. However, the ROE for REIT is generally low when compared with other stocks, as REITs are expected to be stable assets thus it’s ROE generally stays in the range of 2% to 5%.
Using the financial tool for SGX listed stocks, I got these values for CapitaLand Investment’s (CLI):
- Current ROE: 3.433%
| Year | Return on Equity (ROE) |
|---|---|
| 2024 | 3.433% |
| 2023 | 1.211% |
| 2022 | 5.387% |
| 2021 | 9.397% |
| 2020 | -4.423% |
I am just “ok” with it’s ROE, it is sometimes very high, sometime very low. While, I think CLI is a great stock, the ROE is really unstable.
My Opinion: Fail
7. Price-To-Book Ratio
Check for: a P/B Ratio of less than 1.2
Price to book ratio helps to tell us if a stock is over prices. While it is not a good metrics to assess all stocks, it is a great way to give a brief insights for REITs and can play a good role in determining if the REIT is worthwhile.
However, it is good to note it should not be the key factor when deciding if the REIT is cheap or expensive.
Looking at the current P/B ratio for CapitaLand Investment’s (CLI)
- Price to Book Ratio: 0.928
I think it is consider undervalued, but considering the current economic environment, it is understandable.
My Opinion: Pass
Extra: MOAT Assessment
Check for: Not just having a MOAT, but a great MOAT
MOAT for a REIT is rather hard to determine, or rather, what we should look into is the industry that it is in and the geographical region where the REIT’s properties are located.
CapitaLand Investment’s (CLI) is one of the very few REITs with a strong history of sustainable growing returns for investors.
More importantly, it is the diversified geographical portfolio and industry that it is currently in. CapitaLand Investment’s (CLI) is one of the most diversified REITs that is more like a Exchange Traded Funds (ETF) than just a REIT.
CapitaLand Investment’s (CLI)’s Top Competitors
- Blackstone Inc (BX)
- Mapletree’s REITs (Mapletree Logistics Trust, Mapletree Industrial Trust, Mapletree North Asia Commercial Trust)
- Frasers’s REITs (Frasers Centrepoint Trust, Frasers Logistics & Commercial Trust, Frasers Hospitality Trust)
In terms of MOAT, CapitaLand Investment’s (CLI) has a strong ” cost moat” which is basically “world-class”.
As CapitaLand Investment’s (CLI) have a massive portfolio and a huge range of asset under it’s wing, it is able to reduce it’s operation cost by it’s sheer volume. There is also a “high switching costs” if any of it’s tenant decided to stop renting which make it a good business.
In my opinion, CapitaLand Investment’s (CLI)‘s MOAT is very strong.
My Opinion: Pass (Great!)
REITs Scorecard Verdict: CapitaLand Investment’s (CLI)
Below is how I’ve scored CapitaLand Investment’s (CLI).
| Metric | Weightage | Score |
|---|---|---|
| Portfolio Occupancy Performance | High (2) | 2 |
| Diversified Tenant Base | Low (1) | 1 |
| Dividend Yield | Low (1) | 1 |
| Gearing Ratio or Aggregate Leverage Ratio | Low (1) | 1 |
| Weighted Average Lease Expiry (WALE) | Low (1) | 1 |
| Return of Equity (ROE) | Low (1) | 0 |
| Acceptable Price-to-Book Ratio | Low (1) | 1 |
| Extra: MOAT | High (2) | 2 |
| Total Score | NA | 9 |
Overall Score: 9/10
Why do I find some metrics more important than others?
There are 3 attributes in a company that Warren Buffett wants in particular:
- Wonderful Company at Fair Price
- Stable & Understandable Business
- Vigilant Leadership in Risk Management
This translate to the following 3 metrics I have on my list:
- Price-to-Book Ratio
- Debt-To-Equity Ratio or Gearing Ratio for REITs
- MOAT
Thus, for these metrics, I will put a higher weightage on my scoring.
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Antony C. is a Singaporean dividend investor focused on building passive income through REITs, ETFs, and Dividend Stocks. With 15+ years of experience investing in Singapore, Hong Kong, and China markets, he founded IncomeBuddies.com to share practical wealth-building strategies tested in his own portfolio since 2008. His expertise has been featured in Yahoo Finance, Nasdaq, and NFAA, and he’s the published book author of "Start Small, Dream Big".