CapitaLand Launches China Opportunistic Strategy With $820M in Commitments

One day after revealing a new China-focused data centre fund, Singapore’s CapitaLand Investment has announced the launch of a special situations strategy for China with a total of S$1.1 billion ($820 million) in committed equity.

The CapitaLand China Opportunistic Partners Programme comprises a S$291 million single-asset fund and a S$824 million programmatic joint venture. The equity commitment includes S$892 million secured from top tier global institutional investors, which hold an 80 percent stake in the programme.

CapitaLand Investment, the SGX-listed fund management arm of property giant CapitaLand, holds the remaining 20 percent stake in CCOP, in line with its asset-light strategy to grow funds under management while keeping strong alignment with its investors and partners, the firm said Thursday in a release.

“The establishment of CapitaLand China Opportunistic Partners Programme following our three onshore RMB funds and China Data Centre Partners fund demonstrates CLI’s strong ability to raise both onshore and offshore funds to accelerate our growth in China,” said Puah Tze Shyang, CEO of China at CapitaLand Investment.

Seeded With Office Project and Shed

The single-asset fund has acquired Beijing Suning Life Plaza, an integrated development with office and retail components in the capital’s CBD, for S$553 million ($412.7 million). CCOP plans to redevelop the asset as a Grade A office that will command higher rent.

The 19-storey property has a net lettable area of 52,600 square metres (566,182 square feet),  including 24,200 square metres of office space and 28,400 square metres of retail space. The office NLA will increase to 55,000 square metres after the repositioning, and a 6,500 square metre ancillary retail space will be retained in the basement and first levels.

The programmatic JV will invest in special situation opportunities in the commercial and new economy sectors, including office, retail and industrial, with investors having full discretion over whether to participate in each proposed investment under the venture.

In its first transaction, the JV acquired a logistics development in Guangdong’s Foshan for S$157 million ($117.2 million). CapitaLand Investment first acquired the build-to-suit project, which is fully pre-leased to a leading domestic textile e-trading platform, last May.

The warehouse’s 15-year lease includes annual lease escalation, providing stable and predictable cash flows, the fund manager said. Construction of the 140,355 square metre facility is expected to be completed in the third quarter of this year.

Appetite for Chinese Revives

CapitaLand Investment announced Wednesday that it was setting up a China data centre development fund with plans to invest in two Greater Beijing hyperscale projects that would add S$1 billion ($750 million) to the firm’s funds under management upon completion.

CapitaLand China Data Centre Partners has secured S$530 million in committed equity and represents CapitaLand Investment’s third data centre development fund, following the establishment of two such funds in South Korea.

“CCOP and CDCP signal returning foreign capital appetite for China,” said Simon Treacy, CEO of private equity real estate at CapitaLand Investment.

CapitaLand Investment on Thursday posted a profit from operations (excluding gains or losses from divestments, revaluations and impairments) of S$609 million for 2022, up 23 percent from a year earlier. The firm attributed the result to better performance in its fee income businesses and a recovery in its lodging segment.

Revenue for the year rose 25 percent to S$2.88 billion, boosted by higher contributions from fee income and real estate investment. Earnings before interest, tax, depreciation and amortisation fell 20.4 percent to S$1.97 billion amid lower gains from asset recycling and revaluation of investment properties, partly mitigated by improved EBITDA from operations.