Dear readers, City Developments Limited (CDL) stock closed at $6.38 yesterday (25 July 2025), marking a stunning recovery from its recent low. Since touching $4.35 per share on 9 April 2025, CDL’s stock has staged an impressive rally—delivering nearly 47% capital gains in just over three months. For investors who bought during the dip, the returns have been more than rewarding.
But what is driving this upward momentum? Is it sustainable? And what should investors expect next, especially with related counters like CDL Hospitality Trust (CDLHT) also gaining ground? Let’s unpack the developments.
CDL: RECOVERING FROM TURBULENT TIMES
The capital appreciation of CDL shares is not just a matter of market optimism—it reflects a turnaround in sentiment after a dramatic period that placed the company squarely in the media spotlight.
Let’s revisit the key events that contributed to this drama:
Public Spat Between Chairman and CEO Son
Earlier this year, CDL made headlines not for business achievements, but for an internal leadership conflict. The widely reported disagreement between CDL Chairman Kwek Leng Beng and his son, Group CEO Sherman Kwek, raised questions about succession planning, board unity, and investor confidence. The tension was reportedly around strategic directions and performance expectations, casting a temporary shadow on the group’s governance.
WHY CDL STOCK IS RECOVERING
Despite the early-year turbulence, the current rally is supported by three key reasons:
1. Leadership Stabilisation and Renewed Investor Confidence
While the public spat between Chairman Kwek and CEO Sherman Kwek caused market concern, there is now a sense that the leadership team is moving towards resolution and alignment. Furthermore, the absence of any additional high-profile resignations or governance-related controversies has contributed to investor confidence that the worst may be over.
This perception of stabilisation is critical in real estate companies, which typically operate over long cycles and depend on trust in the board and management to execute capital-heavy projects.
2. Rebound in the Singapore Property Market
CDL’s core business remains closely tied to the Singapore residential and commercial property markets. Despite cooling measures, demand for prime district projects has stayed relatively firm, particularly from wealthy local buyers and foreign investors, including family offices.
Recent project launches by CDL have been well-received. For instance, its luxury condominium developments saw healthy take-up rates, and several commercial assets have reported improving occupancies. Moreover, the stabilisation in Singapore’s office rental market, after years of uncertainty due to hybrid work trends, adds another positive dimension to CDL’s income outlook.
Also worth noting: CDL has diversified into other markets such as UK, Japan, Australia, and China, reducing its dependence on Singapore-only revenue. Many of these international markets are experiencing gradual post-pandemic recoveries.
3. Growing Market Focus on Value and Dividend Stocks
With global interest rates possibly peaking, and inflationary concerns starting to ease, investors have shifted focus from high-growth tech stocks to value-oriented, dividend-paying companies. CDL, with a strong asset base and stable cash flows, fits that description well. The market is also anticipating that real estate investment companies will benefit from stable-to-lower interest rate environments, reducing borrowing costs and improving margins.
CDL HOSPITALITY TRUST: RIDING ON THE REBOUND
Another counter closely linked to CDL is CDL Hospitality Trust (CDLHT). The trust—which focuses on hospitality assets like hotels and serviced apartments—has also posted solid gains. From its April 2025 low of $0.73, it has climbed to $0.85 per share as of 25 July 2025, marking a 16% gain.
Several reasons are behind this positive movement:
a) Tourism Recovery and Events Boost
With Singapore’s tourism sector recovering robustly post-COVID and several high-profile international events returning (e.g., F1 Night Race, international conferences, and music concerts), demand for short-term accommodation has risen sharply. CDLHT, with its strategic properties like Orchard Hotel and Studio M, is well-positioned to benefit.
b) Improving Financial Metrics
CDLHT has shown quarter-on-quarter growth in RevPAR (Revenue Per Available Room), a key hospitality metric. Several of its overseas properties in Japan, Germany, and the UK are also witnessing a recovery in occupancy and pricing power. The trust’s distribution per unit (DPU) has started to tick up, which appeals to income-focused investors.
c) Technical Breakout and Moving Averages
From a technical analysis perspective, CDLHT’s share price has broken above its 200-day moving average. This signals a bullish momentum in investor sentiment. Market technicians often view such crossovers as a sign of a possible sustained uptrend.
RISKS AND HEADWINDS TO WATCH
While the recovery in both CDL and CDLHT is promising, investors must not ignore the potential risks that could derail this momentum.
1. Interest Rate and Debt Exposure
Both CDL and CDLHT operate in capital-intensive sectors. As such, their balance sheets carry significant debt. Although interest rates appear to be peaking, higher-for-longer scenarios could hurt net margins, particularly in overseas markets where borrowing costs are still elevated.
CDLHT in particular, due to its trust structure, typically distributes most of its income, limiting its capacity to reinvest or reduce debt aggressively. Hence, rising financing costs or refinancing risks remain key concerns.
2. Geopolitical and Tourism Volatility
CDLHT’s performance hinges significantly on international travel and global economic conditions. Any resurgence of pandemic-related travel restrictions, geopolitical instability (e.g., ongoing concerns around China–US tensions), or terrorism-related fears can sharply reduce hotel occupancies and tourism demand.
3. Corporate Governance and Succession Uncertainty
Although the public family dispute seems to have cooled, succession risk at CDL is still unresolved. Investors want to see a clear roadmap for leadership continuity, especially with an ageing chairman and recent challenges in board cohesion. Any re-emergence of public disagreements or director exits could reignite investor concerns.
4. Asset Valuation Adjustments
Both CDL and CDLHT carry large portfolios of properties. Should the broader market undergo a correction in real estate prices—either due to interest rate tightening or changes in valuation methodologies—it could lead to asset write-downs or impairments. This risk is especially relevant in overseas markets where regulatory shifts can also impact valuation benchmarks.
THE ROAD AHEAD: WHAT INVESTORS SHOULD LOOK FOR
As investors contemplate their next moves with CDL and CDLHT, here are several watchpoints to consider:
- Next Earnings Results – CDL’s next set of financial will be crucial. Investors will want to see growth in earnings, improvements in gearing ratios, and updates on project pipelines.
- Dividend Guidance – Any sign of stable or increasing dividends for CDL and CDLHT will be well-received in today’s yield-seeking environment.
- Leadership Clarity – Investors will be watching for clearer communication on succession planning, especially with recent board drama still fresh in memory. If the leadership can show a united front, it will go a long way in restoring long-term investor confidence.
- Overseas Expansion Updates – CDL’s forays into Japan, UK, and Australia have been part of its diversification plan. Updates on how these markets are performing and whether they are cash-flow accretive will help investors assess future value creation.
- Hospitality Sector Guidance – For CDLHT, the outlook for the year-end travel period, ongoing property refurbishments, and RevPAR trends will be key indicators of medium-term performance.
CONCLUSION: SIGNS OF REJUVENATION, BUT CAUTION REMAINS
CDL’s stock rally to $6.38 and CDLHT’s advance to $0.85 reflect a rejuvenation in investor sentiment. After months of uncertainty, it seems that the market is once again focusing on fundamentals and forward-looking prospects rather than governance noise.
However, long-term success depends on execution, communication, and strategic clarity. Investors would do well to maintain a balanced view—acknowledging the turnaround potential but staying alert to ongoing risks.
For those who already hold CDL or CDLHT, the recent gains provide an opportunity to reassess your portfolio—possibly take partial profits, reallocate risk, or double down with conviction if you believe the best is yet to come.
As always, do your own due diligence, diversify, and invest with a long-term view.