sustainability-linked loan is aligned with our commitment to achieving operational net zero by 2030 for our new and existing whollyowned assets and developments under our direct operational and management control, with the entire portfolio achieving operational net zero by 2050. With this latest 1.5°C loan, CDL has secured around $6 billion of sustainable financing in the form of a green bond, various green loans and sustainability-linked loans to date. T THE NEXT LAP For the year under review, the same market dynamics that were favourable from an acquisition standpoint – compressed asset valuations and subdued investor sentiment – worked against the Group’s capital recycling plans. Despite the muted climate, we recorded total sale proceeds of $632.5 million from our strategic divestments in FY 2023. These include the sale of a small land plot located at Tanglin Shopping Centre, eight strata units at Citilink Warehouse in Singapore, an industrial property at Mina Parade in Brisbane, Australia, the Millennium Harvest House Boulder hotel in the US, and the freehold Shirokane land site in Tokyo, Japan. Apart from achieving capital gains through divestments, we continue to explore ways to optimise financial efficiency and unlock shareholder value. In November 2023, the Group launched an Off-Market Equal Access Offer to buy back up to 10% of the total issued Preference Shares at an offer price of $0.78 per share. Through the offer, the Group is able to exercise greater control over our share capital structure, while Preference Shareholders are provided a cash exit opportunity to partially monetise their holdings. The Group completed the buyback of the maximum allowable amount of Preference Shares in December 2023. With the cancellation of the purchased Preference Shares, the Group was able to reduce the finance cost pertaining to the coupon payment obligation for these shares. In line with our focus on transforming our business through new platforms, the Group will continue to pursue our fund management aspirations, leveraging our expertise and sizeable asset base to launch new initiatives. As at 31 December 2023, our assets under management (AUM) stood at US$3 billion. Through a three-pronged approach, which includes forging strategic partnerships to co-invest or manage assets; nurturing our existing platforms such as CDL Hospitality Trusts (CDLHT), IREIT Global and HThree City; and building a strong performing recurring income portfolio that provides the flexibility of asset injection into listed or unlisted platforms, we will continue to achieve AUM growth via organic and inorganic means. Looking ahead to 2024, capital management remains a key focus for the Group. We will adopt a prudent approach to new acquisitions to manage our gearing while proactively pursuing well-timed divestments to recycle capital and unlock value from our asset portfolio. APPRECIATION I would like to thank our esteemed Board of Directors for their invaluable guidance and wise counsel. Your contributions have sharpened our strategy, propelled our growth and managed our risks. To the ExCo and Senior Management team, thank you for your tireless efforts in shaping our Company’s future trajectory. Your leadership has been instrumental to our success. To all my dear colleagues, thank you for embracing collaboration and driving innovation, all the while upholding integrity. You are the ones who have truly turned our aspirations and visions into reality. On behalf of the Group, I would like to express our deep gratitude to all our shareholders, investors, customers, business partners and stakeholders. Thank you for your trust, confidence and support. As we continue to build for the future, I look forward to writing the CDL story with you. Sherman Kwek Group Chief Executive Officer G BUILDING FOR THE FUTURE The challenging market conditions and depressed valuations in 2023 presented us with attractive acquisition opportunities, enabling the Group to significantly expand our portfolio and strengthen our growth prospects. We completed about $2.4 billion of strategic investments to grow our development pipeline, enlarge our living sector portfolio, enhance our recurring income stream and expand our hospitality footprint. In Singapore, we secured two sites via the Government Land Sales (GLS) programme to replenish our development landbank. In September, we acquired a site at Champions Way in Woodlands for $294.9 million, which will be developed into a residential project with 348 units and an Early Childhood Development Centre. In November, the Group and our JV partners clinched a prime GLS site at Lorong 1 Toa Payoh for $968 million, which will be developed into a 777-unit residential project. Both sites are strategically located within minutes' walk to an MRT station and in established neighbourhoods with a healthy catchment. Along with the residential components of our two ongoing mixed-use redevelopment projects – the 246-unit Newport Residences (formerly Fuji Xerox Towers) and the 366-unit Union Square Residences (formerly Central Square) – we have a solid, diversified launch pipeline of around 1,800 units. Away from home, we acquired the iconic St Katharine Docks waterfront estate in London for £395 million (approximately $636 million), along with another two forward-funding PRS developments, 1NQ in Manchester and Morden Wharf in London, for £152.4 million (approximately $255.3 million) in total. We also acquired a portfolio of 25 high-quality residential assets in Tokyo’s rental housing market for JPY 35 billion (approximately $321.9 million) and invested in four residential assets in Osaka (two pending sale completions). With the strong rebound in global tourism, the Group seized the opportunity to broaden our hospitality footprint in major gateway cities, acquiring three hotel assets with a total of 1,080 keys in Brisbane, Seoul, and Osaka for approximately $381.6 million. E ELEVATING PORTFOLIO VALUE Asset rejuvenation and portfolio enhancement are fundamental to our GET strategy. We continuously explore avenues to derive more value from our asset portfolio through asset enhancement initiatives (AEIs), asset repositioning and redevelopment prospects. To unlock value from our asset portfolio in Singapore and realise gross floor area (GFA) uplift through various Government incentive schemes, we have progressed on the redevelopment of our former Fuji Xerox Towers (into Newport Plaza) and the former Central Mall and Central Square properties (into Union Square). When completed, these two mixed-use developments will bolster the Group’s commercial portfolio and enhance our recurring income. In 2023, we completed a sizeable AEI for Jungceylon Shopping Center, our retail mall in Patong, Phuket. Post-AEI, the property has achieved committed occupancy of 90.0% as at 31 December 2023. During the year, we also started a two-phase AEI at City Square Mall, our largest mall in Singapore at Farrer Park. The AEI will add about 26,000 sq ft of net lettable area (NLA) to the mall via the Community/Sports Facilities Scheme. Upon completing the entire AEI by 1H 2025, the mall will feature a diverse mix of new-to-market retailers and refreshed shopper touchpoints for an elevated shopping experience. Sustainability integration and alignment within our asset portfolio are crucial to our enhancement strategy. By embracing innovation, collaboration and sustainable development practices, we can reduce our carbon footprint and achieve operational cost savings from resource efficiency initiatives. From 2012 to 2023, we realised energy savings of over $42 million from such initiatives across all our managed buildings in Singapore. To accelerate decarbonisation, we continue to align our finance and ESG priorities. In December 2023, we marked a new sustainable financing milestone as the first corporate to obtain the OCBC 1.5°C loan, with interest rate incentives pegged to annual decarbonisation performance targets. The three-year £200 million (approximately $338.2 million) OVERVIEW 21 20 OVERVIEW ANNUAL REPORT 2023 CITY DEVELOPMENTS LIMITED
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