CapitaLand Group
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CapitaLand Group
With a solid business ecosystem, we deliver long-term sustainable value to our stakeholders.
CapitaLand Investment expands private credit fund business to South Korea with the close of maiden KRW 180 billion fund
20 Feb 2025
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CapitaLand Korea Investment No. 1 Private Equity Fund has deployed a KRW 40 billion loan for the development of a data centre (pictured) in Guro, Seoul. With positive demand-supply dynamics and 30 megawatts of power secured, the data centre is well-positioned to capture demand when completed in 3Q 2028.
Seoul, 20 February 2025 – CapitaLand Investment Limited (CLI), a leading global real asset manager, has closed its first South Korea private credit fund with a total equity commitment of KRW 180 billion1 (S$169.2 million2), increasing its funds under management in its focus market of South Korea to S$3.1 billion. The CapitaLand Korea Investment No. 1 Private Equity Fund (PEF) will invest in construction, asset-backed or mortgage loans for diversified asset classes such as data centre, lodging, office or residential in gateway cities in South Korea.
CLI has formed a strategic partnership with Korea Investment & Securities (KIS), a subsidiary of a major financial conglomerate Korea Investment Holdings, to jointly manage PEF as co-general partners. CLI holds an 11% sponsor stake in PEF, which is in line with its asset-light strategy to grow its funds under management while keeping strong alignment with investors.
PEF has deployed a KRW 40 billion loan for the development of a data centre in Guro, Seoul. The Guro district is a key data centre cluster in the west of Seoul, five kilometres from Yeouido Business District. The cluster hosts several leading cloud companies as well as IT and financial companies. With positive demand-supply dynamics and 30 megawatts of power secured, the data centre is well-positioned to capture demand when completed in 3Q 2028. SK Ecoplant, which has a credit rating of A-, will deliver the project and provide completion guarantee. SK Ecoplant is the construction and engineering arm of SK Group – one of the largest conglomerates in South Korea. KT Cloud Corp., a subsidiary of South Korea's telecommunications giant KT Corp, will lease and operate the data centre.
"The strong institutional participation in PEF is testament to the network and trust CLI has built over more than 20 years of operating in the country. Leveraging CLI’s deep understanding of South Korea’s real estate investment landscape across multiple asset classes, we are able to expand our suite of fund products and identify suitable investment opportunities to meet investors’ demand."
- Matthew Sohn, CLI’s Chief Executive Officer for Korea
Matthew Sohn, CLI’s CEO for Korea
“CLI has been fast-tracking its growth in private credit and its entry into South Korea’s private credit segment is in line its investment strategy that focuses on the theme of ‘Disruption’. Despite the gradual decline in interest rates, South Korean banks have been reducing their proportion of real estate loans in their portfolio3. As traditional lenders in South Korea become increasingly conservative, the widening funding gap creates opportunities for private lenders. Through our strategic partnership with KIS, the combination of our deal-sourcing, fund management and private credit expertise will position PEF for success. We see strong potential to scale our private credit portfolio in South Korea and remain committed to delivering long-term value for our capital partners,” added Mr Sohn.
CLI’s expansion in private credit
The launch of PEF in South Korea follows CLI’s announcement in December 2024 to acquire4 Wingate for A$200 million5 (KRW 182.6 billion6). Wingate is one of Australia’s leading and largest private credit investment managers. With the addition of Wingate, CLI will expand its private credit business and its portfolio in Australia. Wingate will also enlarge CLI’s extensive proprietary deal origination networks and enhance its access to more institutional and private high net worth investors.
In November 2024, CLI also announced the close of its Australia Credit Program (ACP). Conceived and originated in partnership with Wingate, ACP is CLI’s A$265 million (KRW 241.9 billion6) maiden credit fund.
Growing CLI’s presence in South Korea
With the addition of PEF, CLI manages 16 private funds in South Korea. In August 2024, CLI closed a value-add office blind pool fund in South Korea with total equity commitment of KRW 200 billion (S$188 million2). The private fund is a strategic partnership with KB Bank, an affiliate of the country’s largest financial group, KB Financial Group. In September 2023, CLI's flagship regional core-plus fund, CapitaLand Open End Real Estate Fund, acquired a newly completed, high specifications logistics property Anseong Seongeun Logistics Centre for S$112 million (KRW 119.1 billion7).
CLI’s diversified portfolio in South Korea comprises offices, logistics facilities, lodging properties, self-storage and data centres8. CLI has nine serviced residences and hotels, with more than 2,400 units in Seoul, Busan, Cheongju, Incheon and Jeju, through its wholly owned lodging business unit, The Ascott Limited and its lodging trust, CapitaLand Ascott Trust.
Notes:
1 Includes CLI’s equity contribution.
2 Based on the exchange rate of KRW 1 to S$0.000940 unless stated otherwise.
3 Source: CBRE Korea’s 2024 Korea Investor Intentions Survey.
4 Plus an earn-out that is based on certain performance hurdles over a three-year period post completion of the transaction.
5 Subject to completion adjustments.
6 Based on the exchange rate of A$1 to KRW 912.925532 unless stated otherwise.
7 Based on the exchange rate of S$1 to KRW 1,063.829790 unless stated otherwise.
8 Including assets under development.
