New Issue: GuocoLand plans on issuing new 4.25Y SGD senior unsecured bonds at an FPG of 2.50%.

• GuocoLand Limited (GuocoLand) plans on issuing new 4.25-year SGD senior unsecured notes at the final price guidance (FPG) of 2.50% for institutional and accredited investors only. The new issuance matures on 30 September 2030. Net proceeds will be used to finance general working capital and corporate requirements of the group. Do note that the issuer is technically GLL IHT Pte. Ltd., a wholly owned financial subsidiary of GuocoLand, and the notes are guaranteed by GuocoLand. Hence, our analysis below is centred on the credit profile of GuocoLand.

• GuocoLand and its subsidiaries are a leading real estate group with two main operating segments: 1) Property Investment (PI) and 2) Property Development. Investment properties account for approximately ~60% of the group’s total asset base as at 31 December 2025. The group’s investment properties span across its key markets of Singapore, China, and Malaysia, last valued at S$7.0b as of 31 December 2025 (1HFY26). GuocoLand is a subsidiary of Guoco Group Limited, which is a member of the Hong Leong Group.

 
• For the first six months ending 31 December 2025 (1HFY26), GuocoLand reported revenue of S$792m, down 22% YoY from S$1.0b in 1HFY25, primarily due to lower revenue recognition from its PD segment as projects progressed through different stages of completion. This was partly offset by continued growth in recurring rental income from its PI portfolio. PD revenue fell 27% YoY to S$612m (1HFY25: S$842m), while PI revenue increased 5% YoY to S$143m. The stronger PI contribution reflects the continued ramp-up and stabilisation of assets such as Guoco Midtown, Guoco Midtown II and Lentor Modern retail mall.

 
• Despite lower revenue, profitability remained resilient. Profit before tax (PBT) edged up 1% YoY to S$119m, while attributable profit increased 14% YoY to S$85m. This was supported by a 30% YoY reduction in net finance costs to S$68.6m, driven by lower borrowings and easing interest rates. Profit after tax rose 13% YoY to S$98.6m. Operating cash flow rose 83% YoY to S$698m in 1HFY26, supported by the collection of residential sales proceeds and the monetisation of development inventories. While cash generation is naturally lumpy, given the project-based nature of property development, the strong inflow demonstrates GuocoLand’s ability to monetise development inventories and convert accounting earnings into cash generation.

 
• Operational metrics across the investment portfolio remain strong, with Guoco Tower, Guoco Midtown and Guoco Midtown II retail achieving 100% commitment rates. Lentor Modern retail mall also reached approximately 90% retail commitment, demonstrating healthy leasing demand across the portfolio.

 
• Looking forward, we remain constructive on GuocoLand’s earnings profile given the continued expansion of its recurring income base. Rental revenue and related income increased from S$70m in FY17 to S$281m in FY25, representing a 19% CAGR, supported by the completion and stabilisation of Guoco Tower, Guoco Midtown, Guoco Midtown II and Guoco Changfeng City. The continued leasing ramp-up at Lentor Modern retail mall should further increase the contribution from recurring income and enhance earnings visibility. Meanwhile, the group continues to demonstrate strong residential sales execution, with recently launched projects achieving robust take-up rates, including Springleaf Residence (96% sold), Faber Residence (91% sold) and Penrith (97% sold) as of 31 December 2025. These projects should provide earnings support through progressive revenue recognition over the coming years. Upcoming launches such as River Modern (1Q2026) and Tengah Garden Avenue (2Q2026) should also replenish the development pipeline. Overall, we believe GuocoLand's twin-engine strategy of property development and property investment continues to support a stable credit profile despite cyclical fluctuations in development revenue.

• For 1HFY26, GuocoLand’s balance sheet saw decent improvement, with total loans and borrowings declining 12% to S$4.8b (compared to S$5.5b as of 30 June 2025), primarily due to repayment of development loans using residential sales proceeds. Meanwhile, cash and equivalents remained healthy at S$764.1m, providing substantial coverage against borrowings of S$807.8m due within the next 12 months.  Consequently, the debt-to-asset ratio improved to 0.41x, down from 0.44x as of 30 June 2025, marking the lowest level over the past five years. We also note that approximately 63% of borrowings remained secured, backed by S$7.3b of pledged assets. The substantial collateral coverage provides a meaningful buffer for refinancing activities and supports continued access to bank funding, leading us to expect no significant challenges in meeting the group’s upcoming debt maturities.

 
• Looking ahead, we expect GuocoLand’s credit profile to remain stable. Continued growth in recurring rental income, robust residential sales and an active development pipeline should support earnings and cash flow generation over the medium term. Improving leverage and substantial asset backing provide adequate financial flexibility to meet upcoming obligations and navigate potential property market cycles.

 
• Recommendation: GuocoLand is unrated, while the new issue is expected to be unrated as well. In Table 1 below, we compare this new issuance with GuocoLand’s outstanding debt and similar-tenor bonds issued by its peers. In general, we think this new issuance by GuocoLand is fairly priced. Investors seeking exposure to a well-established Singapore property developer with a growing recurring income base and improving leverage profile may consider GuocoLand’s new issuance. 

Table 1: Bond comparison 

Disclosure: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds a position in HOBEE 4.350% 11Jul2029 Corp (SGD) and the analyst who produced this report holds a NIL position in the abovementioned securities. This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report – including all investment theses, ratings, price targets and conclusions – has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.