"We remain committed to delivering value to our shareholders through our 'Focus, Balance, Scale' corporate strategy: Focus on the property and hospitality business; strike a balance between our trading and investment income; and have the scale and geographical presence to be an international company of repute."

Dear Shareholders,
We are pleased to announce that the Group did well in 2004, with all strategic business units surpassing their 2003 performance. The Group revenue for the year was S$3.80 billion, a 4.2% increase compared to S$3.65 billion posted in 2003. Profit after tax and minority interests (PATMI) of S$313.0 million tripled that of S$102.6 million recorded in 2003. The PATMI achieved in 2004 was also the highest recorded so far in the four years since the formation of CapitaLand. The Directors are pleased to propose a first and final gross dividend of 5 cents per share, up from 4 cents per share in 2003. In addition, a special dividend of 1 cent per share is proposed.

Over the last four years, the Group's businesses have been honed to deliver performance excellence and greater value to shareholders. The mainstay business of building and marketing homes is now more geographically balanced between Singapore, Australia and China. The latter two countries account for more than half of the Group's profitability. While Singapore has the largest asset base for commercial properties, contributions from overseas commercial assets such as Raffles City Shanghai are steadily increasing. AIG Tower in Hong Kong and recent equity stakes in retail malls across China will augment the Group's income.

With their extensive global footprint and well-managed core operating businesses, CapitaLand's hotel and serviced residence subsidiaries are added drivers to the Group's earnings. The Group has plans to scale up its assets under management (AUM) over the next three years. The Group has been extracting more value through management contracts, advisory services and real estate asset enhancement capabilities. CapitaLand is now increasingly more than a traditional, bricks-and-mortar Singapore property company.

"Over the last four years, the Group’s businesses have been honed to deliver performance excellence and greater value to shareholders. The mainstay business is now more geographically balanced between Singapore, Australia and China."

Maintaining a Strong Balance Sheet
We continued to strengthen our balance sheet in 2004 through a series of initiatives: the listing of CapitaCommercial Trust (CCT) in May 2004; divesting assets on an opportunistic basis; capital management; and channelling of funds to higher yielding investments.

The combined value of CCT units distributed in-specie and CapitaLand shares at the end of 2004, created significant value for shareholders who held on to their CCT units and CapitaLand shares. The proposed 6-cent dividend from their CapitaLand shares and distribution from their CCT units will further increase shareholder return. CCT has announced a distribution of 3.99 cents per unit for the period of 15 May 2004 to 31 December 2004.

Over the last four years, the Group raised its capital productivity by channelling its capital into higher yielding investments. Since 2000, the Group has successfully monetised a total of S$7.5 billion of assets in its drive to raise capital efficiency. In 2004, assets monetised included the sale of 268 Orchard Road, Scotts Shopping Centre and The Ascott Singapore, 11 floors of Shinjuku Square Tower and IP Thai Property Fund. Total net gains from divestments and dilution in interest in Australand Property Group totalled S$43.8 million for 2004.

The Group has also increasingly tapped into the capital market. In addition, capitalising on the low interest rates environment, the percentage of fixed rate loans has increased from 42% in 2000 to 74% in 2004, while Group net debt was reduced from S$8.2 billion at end 2000 to S$5.3 billion by end 2004. Interest costs have similarly been progressively pared down, from S$422.9 million in 2000 to S$272.1 million in 2004.