CapitaLand seeds new value-add fund with Shanghai office asset

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Singapore’s CapitaLand has launched a new value-add fund to invest in commercial real estate in key gateway cities in Asia.

The property group has seeded the vehicle with a newly-acquired stake in a 34-storey office tower in Shanghai.

CapitaLand said it has partnered an unrelated third party in a 50-50 joint venture to acquire 70% of Pufa Tower in Shanghai for RMB2.75bn (€351m).

The acquisition also marks the group’s first office property in Shanghai’s core Lujiazui central business district in Pudong New Area.

Following the deal, CapitaLand and its joint venture partner will own levels 8 to 19 and levels 21 to 32 with a total gross floor area of 41,773sqm, as well as 61 car park lots with property title.

Capitaland said Pufa Tower’s ground floor lobby and the “refuge” floor on level 20 are co-owned with Shanghai Pudong Development Bank. The Chinese bank owns all other floors in the tower not sold to the joint venture.

Lucas Loh, CapitaLand Group president for China and investment management, said the property is a prime asset to be seeded into the [new] commercial value-add fund.

“We see significant potential in enhancing its asset value by upgrading specifications, tenant mix and improving operational efficiencies,“ he said.

CapitaLand would tap third party equity to provide the financial impetus to further accelerate the group’s growth.

It is currently raising capital for its new Asian gateway city commercial fund.

The new vehicle is the latest to join CapitaLand’s stable of unlisted funds, including its Raffles City series of China funds.

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  • QN-2546

    Asset class: Real Estate Equity Fund (non listed).
    Asset region: Europe.
    Size: Total CHF 600m, approx. CHF 100-300m per fund investment.
    Closing date: 2019-06-28.

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