Singapore’s largest real estate developer CapitaLand on Tuesday announced that it has divested its interest in self-storage subsidiary StorHub, one of the city-state’s largest self-storage networks, for S$185 million ($136 million).
The name of the buyer was not disclosed although CapitaLand said it was an unrelated party. The divestment involves the developer’s interest in a group of companies that own and manage StorHub, which operates 12 storage facilities – 11 in Singapore and one in Shanghai.
CapitaLand reportedly acquired a majority stake in StorHub in 2010 for $39.2 million. The self-storage business was launched by Hersing Corporation in 2003 with the opening of its first outlet in Changi.
In July 2013, StorHub acquired Big Orange to boost the number of its storage units to 10,000, spanning over 1 million square feet. Today, StorHub’s eye-catching yellow and blue buildings are located at highly visible, convenient locations, CapitaLand said.
“The divestment of StorHub is in line with CapitaLand’s disciplined approach towards capital recycling,” said Jason Leow, president and CEO of Singapore & International at CapitaLand Group.
Leow added that the “portfolio optimisation” allows CapitaLand to prioritise its capital allocation to core markets and sectors. Last year, the firm divested S$4 billion ($2.9 billion) worth of assets and deployed S$6.11 billion ($4.5 billion) into new investments.
“We will stay disciplined in recycling our assets for reinvestment and capital redeployment, with an annual divestment target of at least S$3 billion,” he added.
The divestment comes as CapitaLand limited raised $391 million in the first close of its maiden discretionary real estate equity fund – CapitaLand Asia Partners I (CAP I).
Tapping into CapitaLand’s extensive network and strong asset management expertise, CAP I will invest in value-add and transitional office buildings in Asia’s key gateway cities, specifically Singapore, Beijing, Guangzhou, Shanghai, Shenzhen, Osaka and Tokyo.
CAP I comes on the heels of the $556-million first closing of CapitaLand’s debut China-focused discretionary real estate debt fund, CREDO I China. The fund aims to raise $750 million to invest in offshore USD-denominated subordinated instruments for real estate in China’s first- and second-tier cities.