Income Insurance holds a half-stake in Far East Organization’s Square 2 mall (Image: FEO)
CapitaLand Investment has won a S$2.4 billion ($1.9 billion) mandate to manage Income Insurance’s real estate portfolio in Singapore, adding to the Temasek-linked fund manager’s base of third-party capital, according to a company statement.
The mandate covers retail, commercial and industrial assets held directly and through joint ventures, with CapitaLand (CLI) also tasked with sourcing new investment opportunities across Asia Pacific. “We are pleased to partner with a strong trusted partner like CLI for our Singapore real estate portfolio,” Income Insurance chief investment officer David Chua said. “Their platform breadth, scale and extensive network within Singapore’s real estate market stands out.”
Disclosures in the insurer’s 2024 annual report show that Income at the time had S$1.07 billion in directly held commercial properties generating S$60.9 million in annual rental income, along with 50 percent stakes in two joint ventures. Previous reports show the company owning the NTUC Income Tampines Junction office building and the NTUC Income Tampines Point block. The company’s joint ventures include Street Square, which holds the Square 2 mall in Novena, and Parkway Parade Partnership, owner of the Parkway Parade retail and commercial complex in Marine Parade, with the insurer’s share of the joint ventures accounting for roughly S$1.31 billion.
The mandate lifts CLI’s assets under management to about S$127.4 billion, as the Singapore-based manager seeks to narrow the gap with regional rivals ESR and GLP, which rank among the largest real estate fund managers in Asia Pacific by AUM.
Mercatus Wind-Down
The Income Insurance appointment follows a multi-year restructuring of property holdings by the insurer and its former sister entity, Mercatus Co-operative, the real estate investment arm of NTUC Enterprise Co-operative.
Income Insurance chief investment officer David Chua (Image: Income Insurance)
Between 2022 and 2023, the two entities disposed of more than S$3.8 billion in assets, including the sale of Jurong Point and Swing By @ Thomson Plaza to Link REIT for S$2.16 billion in December 2022, the S$1 billion sale of 16 Collyer Quay in Raffles Place in July 2022, and a half-stake in NEX shopping centre in Serangoon to a Frasers Property joint venture for S$652.5 million in January 2023.
As Mingtiandi reported in January 2023, Income Insurance tapped CBRE Investment Management to manage its approximately $3 billion real estate portfolio following the lengthy rethink of the NTUC group’s property holdings and the role of Mercatus as its in-house real estate investment manager.
CBRE IM officially took on the management role starting 1 January 2023 after winning Income’s favour through an extensive competitive pitch process. It is unclear whether CLI is now replacing CBRE IM or taking on a different scope of mandate, as Income Insurance’s statement does not address the status of its existing arrangement with the US firm.
Singapore Deal Momentum
The mandate announcement comes days after CapitaLand Integrated Commercial Trust, the largest REIT in Asia and the flagship of CapitaLand Investment’s portfolio of public funds, agreed to sell Asia Square Tower 2 in Marina Bay to a unit of Malaysian developer IOI Properties Group for S$2.476 billion. That transaction was announced together with the trust’s deal to acquire the freehold Paragon integrated development on Orchard Road for S$3.9 billion.
Last month, CapitaLand Ascendas REIT, which is also managed by a unit of CapitaLand Investment teamed with an unnamed sovereign wealth fund to acquire Ascent, a business park in Singapore’s One-North business park, for S$490 million, with CLAR also agreeing to purchase 25 Loyang Crescent, a logistics property, for S$504.2 million.
Other recent transactions include a CICT-led consortium in January winning a government tender for a mixed-use project in northeastern Singapore with a S$1.5 billion, with the REIT set to develop and own 100 percent of the project’s commercial element.
Temasek Circle Fundraising
The Income Insurance mandate is part of a broader wave of capital formation by CapitaLand Investment, with the company earlier this month saying it had raised $320 million for its second Asia Pacific real estate credit fund, with that venture expected to add around $600 million to its funds under management.
In October, the investment manager co-sponsored a UAE industrial development fund with SC Capital Partners targeting a minimum equity raise of $500 million for a project in Ras Al Khaimah in the United Arab Emirates.
With Capitaland last year having acquired a 40-percent stake in SC Capital Partners, the has also been active, with Canada Pension Plan Investment Board in January committing an initial $162 million to SC Capital’s Japan hospitality strategy, with the capacity to increase the total commitment to up to $719 million.
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