City Developments Limited (CDL)
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City Developments Limited (CDL) is a property development and hotel group. The group has more than 300 subsidiary and associated companies, including companies publicly listed in Singapore, London, New Zealand, Hong Kong and the Philippines. In Singapore, CDL is the largest private property developer by assets, and has constructed more than 22,000 homes since 1963. It also owns over 7 million ft2 of lettable commercial, retail, office and industrial space. Globally, CDL’s listed subsidiary Millennium & Copthorne Hotels (M&C) owns or manages more than 100 hotels in 17 countries.
City Developments was registered as a company on 7 September 1963. With an initial eight employees working out of a rented apartment in Amber Mansions, CDL was in the business of acquiring, developing and selling property. By November, the company was listed on the Malayan Stock Exchange, having offered 20 million ordinary shares at 50 cents each for public sale. Its first project was a 200-unit terrace and bungalow housing development named Fresh Breezes in Johor Bahru that was completed in 1965.
CDL’s next developments were the residential estate Clementi Park and the 17-storey City Towers, Singapore’s first high-rise private residential development. Another development was Marine Vista, a coastal estate in Johor. In 1964, CDL opened a finance company as a subsidiary, offering investments protected by CDL’s property developments. In 1970, the company decided to concentrate on property in Singapore after unsatisfactory returns from its developments in Johor. After seven years, CDL had yet to come in to the black against its issued and paid-up capital of S$10 million or to declare a dividend for shareholders.
Acquisition by Hong Leong Group
The company then moved to diversify its income streams. It raised funds through a number of share issues, and acquired companies that could offer it different sources of income. It also acquired retail and office developments that provided rental income, and expanded its land bank. These developments came as CDL became closely associated with the Hong Leong Group, which eventually acquired a controlling interest in CDL in 1972. For the financial year ended October 1972, CDL made a dramatic recovery, recording profits before taxes of some S$5.3 million compared to a loss of S$262,283 the year before. The greater resources of the Hong Leong Group allowed CDL to expand its investments; in January 1973, a newspaper report had CDL’s total assets as S$18.4 million. By February, the company was announcing that it was to buy around S$31.37 million worth of properties.
Under the leadership of managing director and future chairman Kwek Leng Beng, CDL continued its move into commercial, industrial and retail developments. Its first residential and retail development was City Plaza, and the company acquired retail developments like Tanglin Shopping Centre, Katong Shopping Centre, Woh Hup Complex (now Golden Mile Complex), Queensway Shopping Centre and The Arcade. Several of these properties were acquired through a takeover of Singapura Developments in 1981, in a deal estimated at around S$63 million.
For the financial year ended October 1980, CDL announced profits before taxes of S$24 million. Through a slump in the property market in the following years, CDL maintained profitability, from a low of S$12.9 million in 1985 to a high of S$72 million in 1989. Through the 1980s, CDL completed 21 residential developments and 12 investment properties, including the 1983 completion of City House in the Central Business District that became CDL’s headquarters. In 1989, CDL’s land bank was estimated to be sufficient for between 4,000 to 6,000 residential units.
In 1980, CDL bought 65% of listed King’s Hotel (now Copthorne King’s Hotel) for S$13.64 million. The Orchid Hotel (now Copthorne Orchid Hotel) followed, and CDL quickly expanded its portfolio of hotels in Singapore and in the region, including Taiwan, the Philippines, Malaysia and Hong Kong. In 1989, Kwek articulated the company’s strategy as building strategic stakes in foreign property companies and hotels while retaining a domestic-based long-term policy.
The group’s hotels were organised into a new subsidiary company named CDL Hotels, which was listed on the Hong Kong Stock Exchange in 1989. The new company contained hotels like the Manila Plaza, Grand Hyatt in Taipei, Orchid Hotel in Penang, and Orchard Hotel, King’s Hotel and Orchid Inn in Singapore. Through the 1990s, Kwek spearheaded a rapid expansion of CDL’s hotel business, acquiring at bargain prices hotels such as the Gloucester in London, the Macklowe and the Millennium in New York, and in New Zealand. The most significant acquisition came in 1995, when Kwek allied with Saudi prince Al Waleed Bin Talal to purchase the famous Plaza Hotel in New York for S$455 million. Nine years later, the Plaza was sold for US$675 million.
The 1995 purchase of the Copthorne chain added hotels in London, Germany and France, which brought the company’s portfolio to 55 hotels worldwide in 1996. In 1996 Millennium & Copthorne (M&C) was listed on the London Stock Exchange with CDL retaining a 55% share. CDL Hotels had become the eighth largest hotel management chain worldwide by 1998, before its hotels were re-organised into the M&C chain in 2000. As of 2010, CDL controls more than 100 hotels in 17 countries through M&C.
The 1990s and 2000s
A bubble in Singapore’s property sector helped CDL’s net profit grow to S$400 million in 1995. The market crashed soon after in 1997, however, and CDL’s profits swung between S$38 million and S$190 million as the property market slumped and rose over the following decade. CDL had also expanded its property developments in the region, staying profitable through the Asian financial crisis of 1997 and 1998. The group maintained an image of quality by selling off older properties in their portfolio and developing newer ones, and its land bank grew to about 5 million ft2 in 1997.
In 2006, CDL completed the luxurious St Regis Residences and Hotel, which drew a record price of S$28 million for a penthouse condominium unit at the time, and a record S$3,000 per ft2 for its units. That year, the group launched the CDL Hospitality Trusts, comprising the CDL Hospitality Real Estate Investment Trust (REIT) and the CDL Hospitality Business Trust. With the Orchard Hotel and Orchard Shopping Arcade, Grand Copthorne Waterfront Hotel, Copthorne King’s Hotel and M Hotel in its portfolio, it was the first hotel REIT to be listed on the Singapore Exchange. The REIT added a new stream of income for CDL. The rise in the property market around 2006 helped CDL pre-sell residential properties such as The Sail@Marina, One Shenton, The Botannia, Cliveden and St Regis before they were completed. CDL’s assets grew to S$11.5 billion, making it Singapore’s largest property developer by assets.
In 2007, CDL recorded its best-ever profit after tax, making S$725 million. In partnership with Dubai’s Istithmar Group and Israel’s Elad Group, CDL won the tender for the prime South Beach plot with a bid of S$1.68 billion. The project’s development has since been shelved until construction costs moderate. In recent years, CDL’s after tax profits have been S$580.9 million (2008) and S$593.4 million (2009). The group’s highest-ever revenues of S$3.27 billion were recorded in 2009.
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City Developments Limited. Retrieved November 4, 2010, from http://www.cdl.com.sg
City Dev. (1973, March 22). The Straits Times, p. 17. Retrieved November 14, 2010, from NewspaperSG.
City Dev to acquire more properties. (1981, February 12). The Straits Times, p. 15. Retrieved November 14, 2010, from NewspaperSG.
City Dev to list new hotel company in HK. (1989, October 13). The Straits Times, p. 47. Retrieved November 14, 2010, from NewspaperSG.
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H. Leong has big plans for King's. (1981, January 24). The Straits Times, p. 24. Retrieved November 14, 2010, from NewspaperSG.
King’s extension a timely affair. (1980, June 20). The Straits Times, p. 20. Retrieved November 14, 2010, from NewspaperSG.
Property bought by City Dev. (1981, May 5). The Straits Times, p. 17. Retrieved November 14, 2010, from NewspaperSG.
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Richardson, M. (1995, October 17). A global hotel empire is born – CDL becomes a top 10 chain with latest deal. International Herald Tribune. Retrieved November 14, 2010, from Factiva.
Koh, T. et al. (ed). (2006). Singapore: The Encyclopedia, City Developments (p. 129). Singapore: Editions Didier Millet.
(Call no.: RSING 959.57003 SIN - [HIS])
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CDL Group Newsletter. (1987- ). Singapore: City Developments.
(Call no.: RSING 332.6324095957 CDLGN)
The information in this article is valid as at 2010 and correct as far as we are able to ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.
Real estate developers--Singapore
Real estate business--Singapore
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