Singapore-based CapitaLand Investment (CLI), a global real estate investment manager, has set up new RMB-denominated funds with about 4 billion yuan ($551.5 million) in total managed capital to invest in business park opportunities in China.
CapitaLand, which started RMB fundraising and management in June 2021, established the 380-million-yuan China Business Park Core RMB Fund I (CBPCF I) and the 3.2-billion-yuan China Business Park Core RMB Fund II as its first series of business park private funds in China, according to a recent company statement.
CBPCF I secured commitments from four new domestic investors in China, while CBPCF II attracted six new investors to the country. Third-party capital totalled 3.2 billion yuan ($441.3 million), or 80% of the raised capital in the two funds.
CLI, the Asia-focused demerger from the real estate investment business of CapitaLand, holds a 10% and 20% stake in CBPCF I and CBPCF II, respectively. The shareholding positions are aligned with CLI’s asset-light strategy to grow its funds under management (FUM). When fully deployed, the two funds are expected to add over 8.2 billion yuan ($1.1 billion) to CLI’s FUM, said CLI in the statement.
The development comes about four months after CLI established its first RMB fund in China in collaboration with an unspecified domestic asset management firm in June. CLI holds a 12% stake in the 700-million-yuan ($96.6 million) fund. With a plan of cashing in on China’s “rising special situation opportunity” amid the market downturn, the earlier fund offered to acquire an office building in Shanghai in the same month as its official launch.
CLI, which counts Singapore, China, and India as its core markets, carried out RMB capital raising and fund management after its successful registry as a private equity fund manager (PEFM) with the Asset Management Association of China (AMAC) in June 2021.
As one of a few wholly foreign-owned PEFM in China, CLI booked a portfolio of over 200 properties across 40 cities with total assets under management (AUM) of S$46 billion ($32.8 billion) in the country as of June 30. In China, it focuses on office, retail, lodging, business parks, logistics, and data centres across first- and second-tier cities such as Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Hangzhou, and Chengdu.
Its heightened RMB dealmaking efforts followed CapitaLand’s restructuring move in 2021, one year after the parent had posted its biggest loss in 2020 due to disruptions from the COVID-19 pandemic. Due to the restructuring, CapitaLand split CLI and made it the world’s third-largest listed real estate investment management business, while its capital-intensive property development business was taken private.
