CapitaLand Group CEO Lee Chee Koon (left) and his team celebrate the successful deal
CapitaLand said shareholders on Tuesday voted “overwhelmingly” in favour of a $15.9 billion plan to privatise the Singapore property giant’s development operation and spin off its fund management business.
More than 3,400 CapitaLand shareholders voted by proxy at an extraordinary general meeting and a scheme meeting, both held electronically, with 99.59 percent approving a capital reduction and distribution in specie and 97.58 percent agreeing to the scheme of arrangement, Temasek Holdings-controlled CapitaLand said in a press release.
Upon completion of the proposed deal, CapitaLand’s investment management platforms and lodging business will be consolidated into CapitaLand Investment Ltd (CLI), which will be listed by introduction on the Singapore Exchange, while the development business will be placed under private ownership and fully held by CLA Real Estate Holdings Pte Ltd.
“I would like to thank our shareholders for the resounding support,” said CapitaLand group CEO Lee Chee Koon. “I am deeply humbled by and grateful for their trust. With CapitaLand’s restructuring off to a positive start, we can now push ahead with confidence to execute and deliver on our commitment.”
Building a Mega Manager
The SGX listing will make CLI the largest listed real estate investment manager in Asia and the third largest globally, CapitaLand said last month when it previewed the shareholder meetings.
CapitaLand’s Lee Chee Koon expects the privatised developer and listed fund manager to reinforce each other
The freshly minted fund manager will start life with real estate assets under management of S$115 billion ($84.6 billion) and real estate funds under management of S$78 billion held through the firm’s listed and unlisted funds across Asia Pacific, Europe and the US.
CapitaLand will own a 51.76 percent interest in CLI upon its listing. The privatised development business — continuing under the CapitaLand name — will be entirely held by CLA Real Estate Holdings, which currently owns 52 percent of CapitaLand and is in turn wholly owned by Temasek, Singapore’s primary state holding firm.
“These two core entities will complement and mutually reinforce each other,” Lee said Tuesday. “They represent the future of CapitaLand.”
The transaction is expected to be completed in or around mid-September, upon which CapitaLand will be de-listed from the SGX and CLI will be listed.
Strategic Shift Moves Forward
Under the terms of the restructuring, CapitaLand shareholders will receive the equivalent of S$4.1 per share in cash and scrip, including one share of CLI for each share in the existing company, valuing Southeast Asia’s largest developer at about $15.9 billion.
CapitaLand in February reported its first full-year loss in almost two decades, citing revaluation losses and impairments tied to the COVID-19 pandemic. Once the new structure is in place, the group will focus on strategic growth through its capital-efficient, fee-generating investment management unit, as opposed to the capital-intensive, slower-moving development business.
Only last year did CapitaLand relinquish its crown as the biggest fund manager in Asia Pacific real estate by assets under management to fellow Singaporean firm ARA Asset Management, which had $66.9 billion in APAC to CapitaLand’s $62.9 billion.
The good news for CapitaLand was that it cracked the global top 10 for the first time, with its real estate assets under management worldwide exceeding $100 billion, according to the results of the Fund Manager Survey 2021.
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