CapitaLand Investment (CLI) has set up two private funds in Japan and South Korea to grow its funds under management (FUM) by $688 million.
The private fund in Japan has acquired CLI’s interest in two existing commercial assets.
In a deal secured by CLI, the private fund in South Korea has acquired two operating cold storage logistics properties from an unrelated third party.
CLI has also invested alongside its capital partners, obtaining a minority stake in both funds.
CLI’s private fund in Japan is fully deployed through the acquisition of CLI’s interests in two commercial assets in Japan with funds under management of about JPY 44.1 billion ($537.7 million).
CLI has a 4.98% stake in the fund while the remaining stake is held by new local institutional capital partners in Japan such as Keikyu Corporation, Taisei Corporation, Fuyo General Lease and Odakyu Real Estate.
This fund’s underlying assets include a 50% stake in Yokohama Blue Avenue and a 20% stake in Shinjuku Front Tower. The other 50% stake in Yokohama Blue Avenue has concurrently been acquired by another CLI managed fund. CLI will remain as the asset manager of these two office buildings.
The divestment proceeds will be recycled into new growth areas to expand CLI’s portfolio in Japan.
See: CapitaLand Investment appoints Simon Treacy as CEO of private equity real estate
Separately, CLI has structured a private fund in South Korea via a joint venture with PGIM Real Estate. CLI holds a 5% stake in the fund while the remaining stake is held by PGIM Real Estate.
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The fund is fully deployed through the acquisition of two operating cold storage logistics properties with FUM of about KRW 127.1 billion ($150.3 million).
The two properties, both of which are near Seoul, are Foodist Icheon Centre and the Foodist Gyeongin Centre. They are on long-term master leases with Foodist, a nationwide food wholesaler, generating stable fee-related income immediately.
“CLI’s establishment of the two new private funds shortly after its public listing demonstrates capital partners’ confidence in us as an asset-light, capital-efficient global real estate investment manager,” says Lee Chee Koon, group CEO of CLI, who reiterates the company’s key growth strategies of fund management and capital recycling.
Lee notes that with these two new private funds, CLI has launched a total of seven new funds with more than $1.4 billion of new equity raised from external parties year to date.
“As part of our disciplined capital recycling efforts, we have divested two commercial assets to our private funds, further growing our FUM,” he adds.
CLI’s total FUM has increased to $84.3 billion and according to Lee, is on track to meet the target of $100 billion by 2024.
He adds that CLI will also receive recurring fee-related earnings (FRE) through the management of the two funds and their assets.
“We will continue to grow our funds business including launching new funds across different real estate asset classes as well as tapping new fundraising channels,” says Lee.
CLI closed Nov 2 at $3.43, down 0.87%.
Photo of Korea Foodist Gyeongin Centre: CLI
