CapitaLand Investment Sets $650M Target for New Australia Funds as China Outlook Fades

CapitaLand Investment is committing up to A$1 billion ($650 million) to increase its funds under management in Australia, as the Singaporean giant continues to sketch out a strategic shift away from its loss-making real estate bets in China.

SGX-listed CapitaLand Investment has tapped Angelo Scasserra as CEO of the Australia business and Rahul Bharara as chief investment officer, the firm said Thursday in a release. The pair will join from Sydney-based banking startup Barrenjoey in the first half of 2025 and oversee CapitaLand Investment’s more than A$9 billion in assets under management in Australia.

The Down Under ramp-up follows this week’s news that CapitaLand Investment plans to triple its funds under management in Japan with the proposed acquisition of Singapore-based SC Capital Partners and reduce its exposure to China after recording a negative 8 percent return on equity in the market last year.

“A stable, open and developed market, Australia is one of CLI’s focus markets where we see huge potential for both organic and inorganic growth,” said Andrew Lim, chief operating officer of CapitaLand Investment, which is controlled by state holding firm Temasek.

Credit Suisse Veterans

Scasserra joined Barrenjoey in June of last year as head of real estate private capital at the four-year-old finance firm. Previously he spent nearly two decades at Credit Suisse in Australia and Singapore, with his final posting as head of Asia Pacific real estate and co-head of investment banking and capital markets at Credit Suisse Australia.

Bharara spent more than nine years at Credit Suisse Australia in real estate roles, followed by a brief stint as chief investment officer of living sector platform Gurner Group, before joining Barrenjoey in July of last year as a partner in the real estate private capital practice.

“Angelo and Rahul have worked together for over a decade and have extensive experience in the private equity and real estate sector, making them excellent additions to strengthen our leadership team in Australia,” Lim said.

CapitaLand Investment manages 34 logistics properties and business parks and four Grade A office buildings in Australia, where it also has more than 13,500 lodging units across about 150 properties under wholly owned lodging unit The Ascott Ltd.

The firm’s flagship regional core-plus vehicle, CapitaLand Open End Real Estate Fund, purchased a 22-storey office tower at 120 Spencer Street in downtown Melbourne in June 2022 for a reported A$325 million. The same month, Ascott Serviced Residence Global Fund acquired its first Lyf-branded lodging property in Sydney.

In September, CapitaLand Investment reached a A$265 million closing of its maiden Australian Credit Program with backing from Asian investors, the firm said.

Shifting Focus

CapitaLand Investment anticipates a drop in China funds under management to between 10 and 20 percent of total FUM by 2028 — down from 27 percent of the firm’s current S$113 billion in FUM, according to an investor presentation released Friday. The allocation to Australia, Japan and Korea funds is seen rising from 18 percent to between 25 and 35 percent over the same period.

Describing Japan as a “focus” market, the fund manager expects to gain immediate scale in the country after its initial S$280 million acquisition of a 40 percent stake in SC Capital, the firm led by Thai financier Suchad Chiaranussati. Japan FUM is set to grow from S$2.9 billion as of 30 June to S$11 billion, with the country’s share of CapitaLand Investment’s portfolio rising from 3 percent of current FUM to 10 percent.

The two firms expect the initial investment to close in the first quarter of 2025, subject to regulatory approvals, with CapitaLand Investment attaining full ownership by 2030 after exercising options to acquire two additional 30 percent stakes.