SC Capital Sets $1B Target For Sixth Pan-Asia Opportunistic Fund

Singapore-based private equity firm SC Capital Partners has launched its sixth opportunistic Asia Pacific real estate fund with a goal of raising $1 billion, according to a July 22 regulatory filing with the US Securities and Exchange Commission.

SC Capital’s Real Estate Capital Asia Partners (RECAP) series targets undervalued logistics, senior living and data centres, as well as “special situations” real estate opportunities across developed markets in the region such as Australia, Japan and South Korea, according to earlier statements by the company.

The firm’s target for its latest rendition of its opportunistic strategy represents a 17.6 percent increase from the $850 million raised by its predecessor, RECAP V. Launched five years ago, that fund has since recorded at least 27 transactions including the sale of a set of Shanghai logistics assets to Morgan Stanley in May.

Regional Fund Eyed After Japan Success

SC Capital’s RECAP fund series “focuses on value creation through refurbishing, repositioning and operating” properties across Asia Pacific. To date, it has fully exited two vehicles while RECAP V is still in the investment stage.

While it did not disclose further details on its latest strategy, the SEC filing indicated that the company has yet to reach an initial closing for RECAP VI as of 22 July.

The target fund size matches the hard cap set for RECAP V in August 2017. SC Capital hit a $383 million first closing for that venture in late 2017, followed by an $850 million final close in May 2019.

Among the assets acquired on behalf of its fifth vehicle was an industrial site within the Yatala Enterprise Area on the Gold Coast of Australia, that it purchased last December. The 10 Elliot Drive site has an existing 8,600 square metre (92,570 square foot) building that is leased through 2026.

The fund manager is launching its latest pan-Asia opportunistics fund just three months after pooling $1 billion in capital commitments for its Japan Hospitality Fund. Closed less than a year after its launch in mid-2021, the yen-denominated fund had initial commitments from two unidentified global investors.

The Japan fund aims for annual returns to investors of from 14 to 16 percent while its RECAP V has a target gross internal rate of return of about 20 percent based on news reports.

Five Deals In A Year

At the same time that it raises fresh cash, SC Capital has been closing deals in mainland China, Hong Kong and Australia, notching at least five major transactions over the past year.

During this quarter alone the company was reported to have closed two deals in the Greater China region, led by its sale of the Wuhan Manufacturing & Logistics Park in the capital of Hubei province, to the property division of mainland e-commerce giant JD.com.

SC teamed up with Hong Kong’s Lofter Group in July to fully acquire a mixed-use site on Ap Lei Chau island, where they plan to build a 35,000 square foot residential complex on top of a retail podium.

In May, it sold four logistics assets in cities near Shanghai to Morgan Stanley Real Estate Investing from its opportunistic strategy, exiting the portfolio with a combined 210,000 square metres in total space for an undisclosed sum.

SC Capital has also entered the region’s data centre market with the introduction of its digital infrastructure platform, SC Zeus Data Centers, in February. A joint venture with Singapore-based Abner Investments, SC Zeus’s first project is a 45 megawatt hyperscale facility in Seoul. It aims to build a 250 megawatt portfolio across APAC.