Real estate developer CapitaLand has set up a US$1.5 billion (S$2 billion) fund to invest in prime integrated developments in gateway cities in China.
The Raffles City China Investment Partners III (RCCIP III) fund, as it is known, will run for eight years.
It is the company's largest private capital-raising and third private investment vehicle in China, the firm said yesterday.
CapitaLand will subscribe for a 41.7 per cent sponsor stake in RCCIP III. The remaining interests will be held by major investors from Asia, North America and the Middle East, including new and existing investors.
One investor is the Canada Pension Plan Investment Board (CPPIB), which announced yesterday it had invested US$375 million in RCCIP III. This is equivalent to a 25 per cent stake. "(This) gives CPPIB the opportunity to expand on our long-term strategy of investing in high-quality commercial real estate in China to deliver solid risk-adjusted returns over the long term," said Mr Jimmy Phua, CPPIB managing director and head of real estate investments for Asia.
The new fund will be managed by CapitaLand Fund Management, an indirect wholly owned subsidiary of CapitaLand, and invest in projects that comprise a mix of retail, commercial and residential components.
CAPITALAND'S OTHER PRIVATE INVESTMENT VEHICLES IN CHINA
Raffles City China Fund is invested in five Raffles City developments in Shanghai, Beijing, Chengdu Ningbo and Hangzhou.
Raffles City Changning Joint Venture Fund is invested in a Raffles City project in Changning, Shanghai.
"RCCIP III is set to be another excellent example of how we are... working with strong capital partners to build up scale, while enhancing the group's returns on equity through earning fee income," said CapitaLand president and group chief executive Lim Ming Yan. He added that CapitaLand derived fees of $202.1 million from non-listed real estate and real estate investment trust (Reit) management activities last year, accounting for about 4 per cent of total revenue.
In July last year, CapitaLand's unit The Ascott partnered Qatar Investment Authority to set up a US$600 million fund to invest in serviced residences around the world.
The new RCCIP III fund means CapitaLand now manages 16 real estate private platforms and five Reits with total assets under management (AUM) worth more than $45 billion, noted CapitaLand group chief financial officer Arthur Lang.
On CapitaLand's private investment vehicles, Mr Lang, who also oversees the investment management business, said: "RCCIP III brings us closer towards our goal of raising funds with a total AUM of up to $10 billion by 2020."
CapitaLand's first two private investment vehicles in China are the US$1.18 billion Raffles City China Fund that is invested in five Raffles City developments in Shanghai, Beijing, Chengdu, Ningbo and Hangzhou, and the $1.03 billion Raffles City Changning Joint Venture Fund invested in another Raffles City project in Changning, Shanghai.
The developer has eight Raffles City integrated developments in China and one in Singapore.