Singapore-based real estate company CapitaLand is in the process of establishing two new retail property funds, CapitaRetail China Development Fund II and CapitaRetail India Development Fund, which are expected to close in September and October, respectively.
The size of each fund is targeted at USD600 million. CapitaLand is expected to invest in around 45 per cent of the capacity of CapitaRetail China II and 40 per cent of CapitaRetail India. The remaining stakes are expected to be taken up by insurance companies, pension funds and corporations.
CapitaRetail China II is the second series of the CapitaRetail China Development Fund. CapitaRetail China I, which also has a fund size of USD600 million, closed in June 2006 and its funds are more than 90 per cent committed.
CapitaRetail China II, which will invest in retail mall development projects in the country, will look to invest in retail assets from CapitaLand’s strategic joint ventures in China.
CapitaRetail India is the first CapitaLand-sponsored development fund established to invest in retail mall development projects in that country.
“We are pleased to have received strong indication of investors’ interest for CapitaRetail China Development Fund II and CapitaRetail India Development Fund, collectively worth USD1.2 billion,” CapitaLand’s president and chief executive Liew Mun Leong said.
Thus, “The two funds will allow us to capture the tremendous retail investment opportunities in China and India, the two most populous countries in the world and widely regarded as the twin powerhouses driving global economic growth.
“Our integrated China retail real estate strategy has grown our retail presence significantly, owning and managing more than 70 retail malls in 28 cities across China. We are now actively replicating our successful China retail mall strategy in India.
“Increasingly, CapitaLand is recognised as one of the leading real estate fund management companies in Asia, with a strong track record in creating and managing our portfolio of 14 private property funds and five listed real estate investment trusts. With these two new funds, the group is on track to achieve our assets under management target of SGD18 billion by 2007.”
Pua Seck Guan, chief executive of CapitaLand Retail, said, “We are confident that the closing of the CapitaRetail China Development Fund II and CapitaRetail India Development Fund will be a resounding success. The overwhelming indication of interest received from investors for the two new funds is a strong testament to their confidence in our reputable retail real estate business platform and strong on-ground delivery capabilities.
“Professionally-managed organised retail concepts are still relatively lacking in China and India, where we have identified immense opportunities. The funds will allow us to strengthen our position as a significant long-term retail real estate player in China and very quickly expand our retail and fund management footprint in India.’
CapitaLand’s core businesses in real estate, hospitality and real estate financial services are focused in gateway cities in Asia Pacific, Europe and the Middle East. The company’s real estate and hospitality portfolio spans more than 90 cities in more than 20 countries. The listed subsidiaries and associates of CapitaLand include The Ascott Group, Australand, CapitaMall Trust, CapitaCommercial Trust, Ascott Residence Trust, CapitaRetail China Trust and Quill Capita Trust.