City Developments: Targeting private rented sector expansion

City Developments signage on construction hoardingCity Developments signage on construction hoarding

City Developments plans to expand its private rented sector (PRS) portfolio via both converting existing sites and via mergers and acquisitions, the Singapore-listed property developer said Tuesday.

The group is targeting doubling its capital allocation to the PRS segment, City Developments said in a filing to SGX Tuesday with answers to questions from shareholders and from the Securities Investors Association (Singapore), or SIAS, before its annual general meeting (AGM).

In addition, City Developments said it is expanding into other “living sector” assets, such as workers’ dormitories, student accommodations and senior housing, targeting markets including the U.K., the U.S., China, Australia, Japan and continental Europe. In China, CityDev has been expanding in the workers’ dormitories segment via a joint venture set up in 2016, the filing said.

Injecting living-sector assets into a REIT or a private equity fund, potentially managed by the group, is an option, the filing said.

The property group noted that for the fund management segment it has targeted assets under management (AUM) of US$5 billion by 2023; City Developments clarified the figure is for capital where CityDev’s capital is co-mingled with third-party capital in a private fund or REIT.

Funds will be raised via multiple strategies, including leveraging existing relationships with partners, investors, high net worth individuals (HNWI), banks and third-party brokerage or placement agents, the filing said. Depending on fund structure, limited partners can also include insurance companies, sovereign wealth funds, pension funds, mutual funds, HNWI and retail investors, City Developments said.

City Developments said the relevant applications have been made for a proposed initial public offering (IPO) of a Singapore-listed REIT holding U.K. commercial assets. The listing is subject to regulatory approvals and market conditions, the filing said.