CapitaLand Investments is set to launch a second “bigger and more sophisticated” China real estate investment trust (REIT) this year, which will have an integrated development in its portfolio.
The group flagged its proposed new fund, which is expected to float by the middle of this year, during its earnings call this week.
Andrew Lim, group COO and CEO, private equity real estate, told analysts: “We’ve registered for a second C-REIT this year, taking advantage of what the Chinese regulators have acknowledged as something they need to focus on.
“They need to be able to provide retail investors, savers in China, with a proven asset class with stable and visible distribution yields, rather than speculative real estate in China, which we know they are completely allergic to right now. That plays to the C-REIT market, and that plays to our ability to provide assets for them.’
CapitaLand launched its first C-REIT last September, raising RMB2.3bn (€280m).
CapitaLand’s group CEO, Lee Chee Koon: “We created a (RMB) master fund last year, and then the C-REIT. You will see us continue to do that because of our long history in China, our ability to operate and manage.
“We have received a lot of inquiries from capital partners who want to give us more capital to grow the asset management business in China. As a lot of competitors in the market today in China have exited in one way or another, it positions us quite nicely to grow the China business, using domestic capital, in a capital-light manner to grow the business.”
While the group still has balance sheet exposure to China from its days as a developer, the current strategy was to recycle the capital and invest it to grow the fee business, the asset management part of our business, being very capital efficient, and raising third party capital, said Lee.
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