President & Group CEO’s Message

Dear Stakeholders,

2016 has been eventful with continued geo-political uncertainties and economic headwinds in our core markets Singapore and China. Advances in technology continue to impact the way we live, work and play. It has direct implications to CapitaLand’s businesses and influence the way we design and deliver our products to meet our customers’ expectations and preference.

According to scientists from the UK Met Office, the National Aeronautics and Space Administration and the National Oceanic and Atmospheric Administration, 2016 beat 2015 to become Earth’s warmest year since 1850. The Paris Agreement on Climate Change entered into force on 4 November 2016 and our core markets Singapore and China also made national level commitments. The Singapore government just announced its plans for a carbon tax in 2019 and to increase water price by 30% from July 2017.

As a sustainable real estate developer, we want to build a lasting company that adds value to our stakeholders across our diversified global real estate portfolio of integrated developments, shopping malls, serviced residences, offices and homes. Such global developments will spur us to continually strive for operational efficiency, and leverage on innovation to build resilient and sustainable real estate of the future.

We share the United Nations Global Compact’s (UNGC) commitment to deliver lasting benefits to people, communities and markets and became a signatory in 2015. Even before then, we had been adopting universal principles on human rights, labour, the environment and anti-corruption, as well as taking strategic actions that advance the development of society. Despite the challenging environment, we continued to deliver a set of resilient and healthy financial results of S$5.3 billion of total revenue and S$2.4 billion of earnings before interest and tax (EBIT) from our continuing operations. The Group’s return on equity improved to 6.6%, up from 6.1% in 2015.

We persisted in our drive for operational efficiency and achieved energy and water consumption reductions of 18.8% and 21.8% (per m²) respectively for our operational properties, and reduced our carbon emission intensity by 26.2%, compared to the base year 2008. This amounted to utilities cost avoidance in excess of S$108 million for the Group since 2009 and helps us mitigate fluctuations in the global utility costs and resource scarcity. By end 2016, we installed over 80 electric vehicle (EV) charging stations in 30 of our properties in Singapore, China, Belgium, Germany and Japan. The total electricity charged at these stations by EVs exceeded 130 MWh which can be translated to more than 613,000 km travelled by EVs.

We understand how buildings touch the lives of our stakeholders, and remain committed to developing buildings that are accessible to all in the community. I am glad that to date, 12 of our Singapore developments have achieved Universal Design Mark from Singapore’s Building and Construction Authority for their accessible features, with 5 of our properties achieving the highest accolade of Universal Design Mark Platinum.

As we continue to expand our footprint to new growth markets and existing gateway cities, we remain vigilant in conducting our business and interacting with stakeholders in a fair and ethical manner, maintaining the highest level of integrity.

We recognise that the long-term success of our business is closely linked with the health and prosperity of the communities we operate in. We offer our staff three days of paid Volunteer Service Leave each year, so that they can play their part in building communities beyond their roles as real estate professionals, and encourage staff to use up all their volunteer leave with a donation to a charity of their choice. In 2016, over 2,100 staff in CapitaLand properties contributed more than 16,000 volunteer hours.

We are committed to re-skill our people to remain relevant in the changing landscape. In 2016, we continued to organise regular evening sharing sessions featuring speakers from within the company, as well as industry experts, to share their experiences on game changing trends and innovation. These were attended by over 560 staff who invested over 3,000 training hours. Staff located outside of the venue could join the session via private streaming. Our overall training exceeded 54 hours per staff on average in 2016, well above the recommended industry standards.

To ensure a good understanding of local socio-political environment and cultural sensitivities, we continued our localisation strategy for overseas operations with locals accounted for about 83% of the employees based in Singapore and 98% of employees based in China in 2016.

We are one of the first Singapore companies to voluntarily report on our sustainability performance since Financial Year (FY) 2009. This was well before the Singapore Exchange issued sustainability reporting guidelines and its plans to introduce the “comply or explain” listing rule for sustainability reporting for FY 2017. We are glad that our effort has been recognised by international and regional listings and accolades. We are the only Singapore company to receive the “Silver Class” distinction in real estate in The Sustainability Yearbook. We are also listed in the Dow Jones Sustainability World and Asia Pacific Index, FTSE4Good Index Series, as well as the MSCI Global Sustainability Indices and STOXX® Global ESG Leaders Indices. More importantly, more than 87% of our staff volunteers expressed their pride and enjoyment working in a company with a positive and vibrant corporate culture.

For our company’s continued success, we want good people who are professionally competent, with good character. This sustainability journey takes continual effort and we urge our stakeholders to share our Group’s commitment to transparency and innovation so that together we can improve the economic, environmental and social well-being of the communities we operate in.

LIM MING YAN
President & Group CEO
CapitaLand Limited