CapitaLand Investment sets up two private funds in Japan and South Korea

Japanese 1,000 yen notesJapanese 1,000 yen notes

CapitaLand Investment has set up two private funds, one each in Japan and South Korea, in a move which will increase its funds under management (FUM) by S$688 million, the property company said in a filing to SGX Wednesday.

The company will also invest alongside its capital partners, taking minority stakes in both funds, the filing said.

“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. Fund management and capital recycling are two of our key growth strategies,” Lee Chee Koon, group CEO of CLI, said in the statement.

The two new funds brought the total new funds launched this year to seven, with more than S$1.4 billion of new equity raised from external parties so far this year, Lee said.

FUM has grown to a total S$84.3 billion, putting CLI on track for its S$100 billion target by 2024, Lee said.

Japan fund

The private fund in Japan has acquired CapitaLand Investment’s interest in two existing commercial assets, giving it a FUM of around 44.1 billion yen or around S$537.7 million, fully deploying its funds, the filing said.

CLI said it has a 4.98 percent stake in the Japan fund, with the remainder held by new local institutional partners in Japan, including Keikyu Corp., Taisei Corp., Fuyo General Lease and Odakyu Real Estate.

The Japan assets include a 50 percent stake in Yokohama Blue Avenue and a 20 percent stake in Shinjuku Front Tower, the filing said.

The remainder of Yokohama Blue Avenue was acquired by another CLI managed fund, while the remainder of Shinjuku Front Tower is owned by unrelated third parties, CLI said.

South Korea fund

The South Korea private fund was set up via a joint venture with PGIM Real Estate, which is part of PGIM, the global asset management business of Prudential Financial, CLI said, adding it kept a 5 percent stake in the fund, with PGIM Real Estate holding the remainder.

The fund is fully deployed after acquiring two operating cold-storage logistics properties from an unrelated third party, giving it a FUM of around 127.1 billion won, or around S$150.3 million, CLI said. The two properties, located near Seoul, have long-term master leases with Foodist, a South Korean food wholesaler, the filing said.

“In South Korea, the new logistics fund is our third private fund focusing on new economy assets established within a year. It adopts a core strategy while our earlier two private funds with third-party capital will invest in two data center development projects in South Korea,” Gerald Yong, CEO of CLI (International), said in the statement. “The new logistics fund allows us to tap into the country’s fast expanding ecommerce market. With COVID-19, there is growing interest in logistics investment especially in cold storage logistics properties.”

Read CLI’s filing to SGX for more details of the properties.