CityDev (C09.SI) shares plummeted 3.15% during Friday's intraday trading session, as investors reacted to news of asset sales and potential further divestments. The stock's decline comes despite a positive outlook from analysts, highlighting the market's cautious stance on the company's capital recycling strategy.

According to Citi analyst Brandon Lee, CityDev has recently divested a California residential asset owned by its wholly owned subsidiary. This move signals the property developer's commitment to proactive capital recycling, bringing the company's total completed sales year-to-date to approximately S$1.94 billion. Lee also noted that CityDev is in advanced talks to sell a retail development on Singapore's Sentosa island, indicating further potential asset disposals on the horizon.

Despite the stock's negative performance, Citi maintains a buy rating on CityDev with a target price of S$9.01. The analyst suggests that the wholly owned unit housing the recently sold residential asset may be undervalued and offers additional divestment potential. This maintained positive outlook, juxtaposed with the stock's decline, reflects the complex sentiment surrounding CityDev's strategic moves in the current market environment.