Keppel, on Oct 19, announced the closing of a China-focused programme as part of its sustainable urban renewal strategy. The close comes after the conglomerate secured a global institutional investor for initial equity commitments of RMB1.6 billion ($300 million). Of the total amount, Keppel’s sponsor stake is RMB160 million.
When fully leveraged and invested, the programme will potentially have assets under management (AUM) of around RMB3.9 billion. It also comes with a further option for the two partners to upsize.
Keppel’s sustainable urban renewal strategy was launched in response to growing international demand for more environmentally efficient urban renewal solutions in gateway cities. The group is presently implementing its sustainable urban renewal capabilities in several projects in real estate markets including Singapore, China, India, South Korea, Japan, and Australia.
According to Keppel, the conglomerate aims to scale its private fund investments in this area through the Keppel Sustainable Urban Renewal Fund (KSURF) to US$2 billion ($2.72 billion) over time.
“As a global asset manager and operator with strong expertise in sustainability-related solutions, Keppel is well-placed to contribute to global sustainable development and decarbonisation efforts. Our deep capabilities in sustainable urban renewal and established track record in Asia are key differentiators for Keppel, positioning us to create high quality, sustainable assets that can generate good investment returns, and leave a positive impact on the environment,” says Christina Tan, CEO of fund management and CIO of Keppel.
“The successful closing of the programme, anchored by a significant global investor, attests to Keppel’s ability to create targeted, highly attractive investment portfolios that global investors seek. It will also drive further investor interest and momentum for KSURF,” she adds.
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“With China transitioning towards high-quality, low-carbon growth, Keppel is well-positioned to continue seizing opportunities as we pivot from traditional residential property development and sale to focus on sectors which benefit from tailwinds and government support, and where Keppel has strong differentiation and value add,” says Louis Lim, CEO of Keppel’s real estate business.
“[Our] sustainable urban renewal is a prime example, where we are integrating people, processes and technology to open up new possibilities for the rejuvenation of older buildings, which can provide greener, less costly and faster-to-market solutions compared to redevelopment. We look forward to contributing our expertise to our private funds, where we will aim to drive energy costs down, improve tenant experience and uplift asset valuations by 10% to 15%,” he adds.
Shares in Keppel closed at $6.32 on Oct 18.
