CapitaLand sets up US$1.5 billion Raffles City China Investment Partners III
Largest private equity partnership established by CapitaLand receives strong support
Singapore, 25 October 2016 – CapitaLand Limited is pleased to announce the successful establishment of its third integrated development private investment vehicle in China – Raffles City China Investment Partners III (RCCIP III). The partnership has fully closed at US$1.5 billion (about S$2.0 billion), making it the largest private capital raise CapitaLand has originated. RCCIP III, with a life of eight years, will invest in prime integrated developments in gateway cities in China. CapitaLand will subscribe 41.7% sponsor stake in RCCIP III while the remaining interests will be held by major investors from Asia, North America, and the Middle East, including new and existing investors. RCCIP III will be managed by CapitaLand Fund Management Pte. Ltd., an indirect wholly owned subsidiary of CapitaLand.
Mr Lim Ming Yan, President & Group CEO of CapitaLand Limited, said: “Real estate is a capital intensive business and private equity is central to the active capital management strategy of CapitaLand as a dominant real estate player. We are pleased to raise RCCIP III, the third in the series of our Raffles City China private equity vehicles. As real estate capital values rise with the growing intensity of competition for assets, institutional investors are attracted to CapitaLand for its established footprint of quality real estate products and services across Asia. CapitaLand’s strong developer-owner-operator capabilities will enable us to deliver better risk-adjusted returns for investors. This, together with our ability to co-invest with our capital partners, aligns us with reputable investors with longer investment horizons such as sovereign wealth funds, pension funds and insurance companies.”
Mr Lim added: “Following our successful partnership with Qatar Investment Authority in the serviced residence sector, RCCIP III is set to be another excellent example of how we are proactively working with strong capital partners to build up scale, while enhancing the Group’s returns on equity through earning fee income. In 2015, CapitaLand derived S$202.1 million of fees from non-listed real estate and REIT management activities, about 4% of the Group’s revenue.”
Mr Arthur Lang, Group Chief Financial Officer of CapitaLand Limited who also oversees the investment management business said, “With RCCIP III, CapitaLand now manages 16 real estate private platforms and five real estate investment trusts with assets under management (AUM) worth over S$45 billion. RCCIP III brings us closer towards our goal of raising funds with a total AUM of up to S$10 billion by 2020. Together with CapitaLand’s strong balance sheet and stable of REITs, the investment management business is differentiated to be the partner of choice for capital partners. We are very pleased to commence a meaningful relationship with our new investors as we further solidify our strong partnerships with our existing investors through the establishment of RCCIP III.”
Mr Lucas Loh, CEO of CapitaLand China, said: “China is a market with robust long-term investment potential with continued demand for property riding on the back of urbanisation, economic growth, the rise of the services sector, a growing middle class, and rising domestic consumption. These socio-economic themes feature prominently in gateway Chinese cities where the growth trajectory remains robust, heralding opportunities for integrated developments around key transportation hubs. For over a decade, CapitaLand’s Raffles City brand name has been well-established in China with its iconic and quality developments that offer integrated lifestyle experiences in prime locations. We look forward to continually build our portfolio of quality integrated developments that delivers robust returns to our investor partners and first-rate value to our customers.”
As part of its Raffles City China strategy, CapitaLand also manages a US$1.18 billion Raffles City China Fund that is invested in five Raffles City developments in China, namely Raffles City Shanghai, Raffles City Beijing, Raffles City Chengdu, Raffles City Ningbo and Raffles City Hangzhou, as well as a S$1.03 billion vehicle in a Raffles City project in Changning district in Shanghai.
According to the recent 2016 Fund Manager Survey jointly conducted by the Asian Association for Investors in Non-Listed Real Estate Vehicles Limited, the European Association for Investors in Non-Listed Real Estate Vehicles and the National Council of Real Estate Investment Fiduciaries in the United States, CapitaLand is the largest fund manager in Asia Pacific and ranked No.11 globally based on total real estate AUM it managed in 2015.