Singapore’s CapitaLand, which seeks to expand beyond Asia, has acquired a portfolio of 16 US multifamily properties for US$835m (€710m).
Lee Chee Koon, CapitaLand’s new president and group chief executive, said the acquisition marked CapitaLand’s entry into the US$3trn US multifamily market.
He said the investment afforded the group expansion out of its two core markets of Singapore and China, and into a new asset class.
The portfolio of “B” grade assets is located in US cities, such as Seattle, Denver and Portland.
Gerald Yong, CEO of CapitaLand International, said that an estimated US$50m would be spent over the next two to three years to renovate the US apartments and improve their rental incomes.
He said CapitaLand planned to scale up its investment in the US, noting that it intended forging a relationship with the developer of the portfolio, a long-term player in the US multifamily sector.
Yong said the US portfolio, acquired from an institutional investor, would initially be held in a private trust.
“Our vision is to build up a vertically-integrated operation in the US in the long term,” he said.
“But, in the medium term, we will consider spinning off into various vehicles and partnerships.”
Lee added: “We’ve seen a build-up of wealth in Asia, with institutions and pension funds looking for investment opportunities.”
CapitaLand made its maiden residential investment in the US in July last year with the purchase of Synergy Global Housing’s corporate rental business.
Additionally, through Ascott and its real estate investment trust, Ascott Residence Trust, CapitaLand has acquired five properties with more than 1,260 units in Manhattan, New York and Silicon Valley.
This latest multifamily portfolio acquisition will more than double CapitaLand Group’s investment in the US to over US$1.5bn.
Lee said: “Beyond expanding the long-term rental housing platform in the US, a market we have ventured into since 2015, we also see potential to build this business in other fast-growing markets, such as China.”
As part of its plan to expand beyond Asia, CapitaLand in May this year also made its second German office acquisition, less than six months following its acquisition of the Main Airport Center in Frankfurt.