CapitaLand Investment Raises $320M for Real Estate Lending in Australia, South Korea

CapitaLand Investment has raised $320 million for its second Asia Pacific real estate credit fund, aiming to lend to industrial, office and residential properties in Australia and South Korea, the Singapore real estate giant said on Monday.

The Temasek Holdings-backed fund manager raised the capital for its Asia Pacific Credit Programme II (ACP II) after having already deployed more than S$10 billion ($7.94 billion) in credit investments across the region, according to a statement. This latest round included $320 million in equity commitments with the company indicating that the vehicle will add about $600 million to its funds under management. 

CapitaLand Investment, which has S$125 billion in assets under management, said the funds would be allocated to five first mortgages for “logistics, office and living assets” in Sydney and Seoul. A spokesperson said the company did not plan to identify the assets, although it supplied a photo of one of the properties, which was described as a new campus-style Grade A office in Sydney.

“Our focus on developed, transparent and well-regulated markets where we have a deep local presence and operating insights allow us to source opportunities with strong downside protection and actively manage potential blind spots,” said Arjun Pandit, a managing director specialising private credit funds at CapitaLand Investment. The fund manager will focus on “senior secured, asset-backed investments” that provide a less-risky investment amid tightening lending conditions, the company said.

Special Situations Expertise

“Our disciplined focus on senior secured, asset-backed investments positions us away from the challenges currently facing the wider credit sector,” said Kishore Moorjani, CEO for alternatives with the private funds division of CapitaLand. The company said it raised the cash for the new vehicle mostly within the region from a “balanced mix” of new and existing investors, including insurers, financial institutions and wealthy families, while CapitaLand has made a 20 percent sponsor commitment to ACP II.

Moorjani joined CapitaLand in November last year after having spent nearly 15 years with Blackstone in Singapore, where he was a founding member of the firm’s tactical opportunities business – an opportunistic, multi-asset class investing platform which functions as a special situations strategy. 

CapitaLand Investment’s first Asia Pacific lending platform, ACP I, focused on Australia in a partnership with Wingate, which led to the Singapore company buying the Australian private credit manager’s property and corporate credit investment operations for A$200 million ($141 million). The purchase announced at the end of 2024 included an “earn-out” based on performance hurdles in the three years after completion. 

Wingate brought A$2.5 billion in funds under management to CapitaLand Investment and increased its funds under management in Australia by more than 30 percent to S$8.3 billion, a statement said at the time. CapitaLand Investment said it was committed to investing A$1 billion in Australia.

ACP I raised A$265 million, which was deployed to finance two “prime mixed-used developments” in Melbourne in Victoria and Adelaide in South Australia, the company said in its statement on ACP II on Monday.

Beyond Australia, CapitaLand Investment will focus on “scalable private credit opportunities in other Asia Pacific Markets, most notably in South Korea, India and Japan, ” chief financial officer Paul Tham said at the time of the Wingate announcement. In February last year the company closed on $130 million in capital for its first private credit fund in South Korea.

Credit Still Good

CapitaLand Investment said Asia’s real estate credit market is seeing increasing demand from institutional investors and fund raising in the sector rose more than 40 percent between 2020 and 2024 with more growth to come.

“In the region, real estate-backed lending is under penetrated, account for just 6 percent of total financing, compared with 21 percent in Europe and 41 percent in the United States, presenting an early mover advantage,” CapitaLand Investment said, adding “we remain committed to scale our asset-light fund management platform.”

CapitaLand Investment is announcing the new fund two months after its Temasek stablemate Keppel Ltd said that it had received a commitment of up to $125 million from China’s Asian Infrastructure Investment Bank to its third private credit fund. That backing from the development institution brought the size of Keppel Private Credit Fund III to over $561 million.

Also in February, Korea Investment & Securities announced its entry into a KRW 500 billion ($348 million) real estate loan facility with US investment bank Goldman Sachs, with the partners planning to back further expand that strategy.