In a deal that will create the largest diversified real estate group in Asia, Singapore-based CapitaLand Limited on Monday announced that it has entered into a transaction with Temasek to acquire from its subsidiary, Ascendas-Singbridge Pte Ltd, all the shares in the two wholly owned intermediary subsidiaries of the latter.
The proposed transaction is valued at S$11 billion ($8 billion), according to a company statement.
Under the terms of the agreement, Temasek will receive S$6 billion, which will be satisfied 50 per cent in cash (S$3 billion) and 50 per cent in new CapitaLand shares (S$3 billion). Post transaction, Temasek’s ownership of CapitaLand will increase from approximately 40.8% to about 51.0%.
The shares will be priced at S$3.50 per share, representing a premium of 11.3 per cent, or approximately S$0.36, over CapitaLand’s one-month volume weighted average price of S$3.1447. The consideration takes into account the adjusted net asset value of Ascendas Singbridge, which includes the value of its fund management platform and the trading value of its three sponsored listed trusts.
The deal is subject to approval of CapitaLand’s independent shareholders at an Extraordinary General Meeting, expected to be convened by 1H 2019.
Ascendas-Singbridge manages three listed trusts, Ascendas Reit, Singapore’s first industrial and business space trust; Ascendas India Trust, the first Indian property trust in Asia; and Ascendas Hospitality Trust, which has a portfolio of 14 hotels in Australia, Korea, Japan and Singapore.
Post transaction, the combined total assets under management (AUM) of the group will exceed S$116 billion. The group’s asset classes will include logistics/business parks, industrial, lodging, commercial, retail and residential with geographical presence spanning over 180 cities across 32 countries.
Commenting on the transaction, Ng Kee Choe, Chairman of the Board of CapitaLand Limited, said: “This transaction represents a compelling opportunity to realise benefits not available to each company on a standalone basis; we will have more opportunities to create enhanced value for our shareholders.”
Ascendas-Singbridge’s flagship projects include Singapore Science Park and Changi Business Park in Singapore, International Tech Park Bangalore and International Tech Park Chennai in India, as well as Dalian Ascendas IT Park and Singapore Hangzhou Science and Tech Park in China.
J.P. Morgan (S.E.A.) Limited and WongPartnership LLP are acting as sole financial advisor and legal counsel to CapitaLand respectively. Allen & Gledhill LLP is acting as legal counsel to Ascendas-Singbridge.
Amid growing interest in Asian real estate investment space, the current deal is one among a series of announcement from real estate funds to float multi-asset or niche platforms. For exposures in the Asian realty space, the investors are not shying away to forge partnerships even though they might seem to be competitors.
Last year Ascendas-Singbridge and Temasek came together for a real estate platform Ascendas India Logistics Programme in which Temasek came as a principal investor. Together both committed about $300 million to invest in logistics and industrial real estate in key locations in India.
Recently, insurance firm Allianz’ realty investment arm Allianz Real Estate partnered with Hong Kong-based private equity real estate firm Gaw Capital Partners for assets in China. Earlier Allainz RE had also pumped in capital in Pan-Asia logistics real estate developer, owner and operator ESR and later doubled the exposure.
Further, Singapore-based warehouse giant GLP, Asia’s top logistics facility provider that got de-listed last year, has set up its third Japan-focused logistics real estate fund – GLP Japan Development Partners III (GLP JDP III) – that is seeking to invest a whopping $5.6 billion (JPY 625 billion). Moving on, ESR has formed a new core joint venture with global real estate investor AXA Investment Managers – Real Assets and a major sovereign wealth fund to acquire “core stabilised logistics assets” in Japan.
Meanwhile, ARA Asset Management is said to be raising a $1 billion pan-Asian infrastructure fund. The firm also roped in former diplomat and investment veteran Grant Dooley to lead the infrastructure platform. Recently ARA in a partnership with UK property group Chelsfield Asia acquired Singapore’s well known office building Manulife Centre for an undisclosed amount.