CapitaLand Investment Q1 Fee Income Climbs 10% as Fundraising Hits $2B

Singapore’s CapitaLand Investment grew its first-quarter fee-related revenue by 10 percent year-on-year to S$310 million, supported by growth in its listed funds platform, and raised S$2.5 billion ($2 billion) in equity during the first four months of the year across its listed and private vehicles.

The haul included equity raised by Japan-focused SC Capital Partners, the real estate fund manager that CapitaLand Investment is acquiring in tranches through 2030. In a presentation, the Temasek Holdings-controlled group said the robust fundraising reflected investor preference for quality and resilience amid a more selective environment.

“Geopolitical developments and uncertainty continue to influence investor sentiment and market activity,” CapitaLand Investment said.

Total revenue fell 2 percent year-on-year during the quarter to S$487 million, with fee income offsetting weaker contributions from balance-sheet investments after earlier divestments. Listed funds continued to underpin earnings, with fee growth driven by contributions across vehicles including CapitaLand Integrated Commercial Trust (CICT), CapitaLand Ascendas REIT (CLAR) and SC Capital’s Japan Hotel REIT.

Recycling Playbook

SGX-listed CapitaLand Investment deployed S$7.2 billion during the period and sold S$3.4 billion in assets as it continued to recycle capital and execute its asset-light strategy.

Investment activity was led by the group’s listed funds platform, which accounted for the bulk of acquisitions, including purchases across retail, logistics, living and digital infrastructure assets.

CICT advanced its proposed S$3.9 billion acquisition of Paragon, a prime Orchard Road mall complex, from Temasek’s Cuscaden Peak, while CLAR acquired a half-stake in Ascent, a Singapore business park asset anchored by multinational tenants, from a CapitaLand private trust for S$245 million.

CapitaLand Ascott Trust purchased three rental housing assets in Greater Tokyo from Singapore’s Patience Group for JPY 4.6 billion ($29.8 million), marking continued expansion in Japan’s living sector, a key growth theme for CapitaLand Investment.

On the divestment side, deals included CICT’s S$428 million sale of Bukit Panjang Plaza to US builder and fund manager Hines. The REIT’s CapitaMall Trust precursor had acquired the 1998-built suburban shopping centre in stages from developer CapitaLand in 2003 and 2007. 

CICT also agreed to sell Asia Square Tower 2 in Marina Bay to Malaysian developer IOI Properties for S$2.48 billion. The trust is selling the office block at a 9.9 percent premium to its most recent independent valuation with a 3 percent exit yield, while redeploying that cash into Paragon at a 3.9 percent yield.

CapitaLand Investment continued to build out its private funds business, securing a S$2.4 billion mandate from Income Insurance and closing a S$400 million Asia Pacific credit programme.

China REIT Combination

At its annual general meeting on Tuesday, CapitaLand Investment signalled that it aims to eventually combine its two China REITs into a single flagship vehicle, as it looks to build scale in its onshore platform and improve capital recycling.

The manager said the plan is to merge its existing CapitaLand Commercial C-REIT, listed in Shanghai last year, with a second China REIT targeted for listing later this year, creating a larger, more liquid platform for stabilised mainland assets.

Management framed the strategy as part of its broader push to tap domestic Chinese capital markets, with a combined vehicle expected to support recycling of mature assets and enhance fee income through greater scale.

At the same meeting, executives addressed shareholder concerns over a potential merger with Temasek stablemate Mapletree Investments, following market speculation about a tie-up of the two asset managers.

CEO Lee Chee Koon said the group would not pursue mergers simply to meet its target of S$200 billion in funds under management by 2028, stressing that any deal would need to deliver clear strategic and financial benefits.

Responding to a shareholder who questioned whether Mapletree would be a suitable fit, management reiterated that there is “no perfect deal” and that CapitaLand Investment would carefully assess integration, affordability and value creation before proceeding with any acquisition.