City Developments plans to step up asset sales and generate more cash from its property development business under a three-year plan as it seeks to boost shareholder returns.

In its strategic review plan for 2027 to 2029 released on Monday, the hotel and property group said that it plans to free up 6 billion Singapore dollars, equivalent to US$4.70 billion, through divestments to recycle capital from mature, noncore or underperforming assets. It expects 30% of the divestment target to come from its hotel portfolio, while 45% will come from its commercial segment.

Group Chief Executive Officer Sherman Kwek said the divestment target is one the property company intends to exceed, seeing it as a floor rather than a ceiling. "Our actual divestment list is bigger than S$6 billion, but sometimes there are cases where an asset is taken out and another is put in," he said in a briefing.

While the company didn't detail the geographic segments of its planned sales, it confirmed plans to sell its legacy U.K. development portfolio valued at around S$800 million. It also intends to exit the Australian market in most property segments.

The Singapore-listed company expects the divestments to deliver more than S$1 billion in profits after tax and minority interest through 2029, while property development cash inflows from existing projects will likely top S$6 billion.

It aims to deploy S$5 billion of growth capital across four sectors--residential, commercial, hospitality and living--and into markets where it has established capabilities, local knowledge and opportunities to generate attractive risk-adjusted returns.

It expects to deploy 60% of the capital to Singapore, keeping the city-state its principal market for new investments, and allocate 30% to China and Japan. The remaining 10% will go to other markets.

CDL also plans to establish a dedicated fund management entity as it aims to double its assets under management to S$10 billion from about S$5 billion as of June 30.

Kwek said the company intends to accelerate its private fund plans, as it hasn't done much in that space yet. "We need more private funds, and we have some coming up in the pipeline," he said. Some assets earmarked for divestment could be seeded into these funds.

DBS Group Research analyst Tabitha Foo said the review delivers a clearer roadmap to boost the company's returns, with some key points being CDL's plan to crystallize value from its hospitality platform and its renewed fund-management focus.

The divestment goal should also reduce the drag from lower-returning assets and strengthen the property company's balance-sheet efficiency, Foo added.

However, she noted that investors might be looking for more color on where CDL's new investments will be deployed and on its plans for its listed trusts and affiliates.

Shares declined 5.9% to S$7.77 after the announcement, putting them on track for their largest one-day percentage decline since February.