CapitaLand forms $416m joint venture to grow multifamily asset portfolio in US

With this new investment, CapitaLand will have $4.7 billion of assets under management in the US. PHOTO: ST FILE

SINGAPORE (THE BUSINESS TIMES) - CapitaLand on Monday (Dec 7) said it has formed a joint venture (JV) to acquire and develop multifamily assets worth some US$300 million (S$416.1 million) in the US.

The JV will invest in assets in the south-east and South-west markets of the US, with an initial focus on Austin, Texas, the property giant said in a press statement.

The JV partner is an Austin-based real estate investment, development and property management firm, which has developed over 25,000 multifamily units in the US since its inception 25 years ago, CapitaLand said.

Both parties have acquired a freehold land parcel in the "high growth, technology driven" city of Austin to develop the JV's first multifamily project, the company noted.

CapitaLand holds an 80 per cent stake in the project, while its partner holds the remaining 20 per cent. The 4.7-acre (1.9 hectare) land parcel will be developed into a mid-rise and green 341-unit suburban multifamily property, which is expected to be completed in 2023.

According to CapitaLand, the property is situated close to commercial, residential and leisure activities, and a five-minute drive from The Domain, which is commonly referred to as "Austin's second downtown". The Domain comprises over 1.8 million square feet (sq ft) of retail amenities and over 3.4 million sq ft of office space, as well as 3,700 apartments and 900 hotel rooms.

The upcoming development is also adjacent to the McKalla Place Major League Soccer Stadium, which is slated to open in spring 2021.

Designed to cater to residents in a post Covid-19 landscape, the property will have features such as keyless entry to the apartments, as well as smart home features. It will also offer a mix of studios, one and two-bedroom apartments with separate work and living areas for residents to work from home, CapitaLand noted.

Dang Phan, managing director for the US at CapitaLand International, noted that across the US, multifamily rents have recovered faster than other asset types during past recessions.

"Prior to Covid-19, allocation of investment capital towards the multifamily sector has exceeded that of other property types and the pandemic has accelerated this preference. Growing our investment in the resilient, liquid and stable-yielding multifamily portfolio will provide income stability."

He added that despite the pandemic, Austin continues to be an "attractive technology, business, government and investment hub with a steady outlook".

"Austin's business-friendly policies, high quality of life and skilled workforce have attracted major technology and Internet companies such as Amazon, Apple, Google, IBM, Oracle and Tesla to set up substantial operations in the city... The demand for quality housing has risen correspondingly, with rents increasing 50 per cent over the past decade," said Mr Phan.

Jason Leow, president of Singapore & International at the CapitaLand group, noted that the latest acquisition adds to CapitaLand's portfolio of 16 freehold suburban multifamily properties which it acquired in 2018.

With this new investment, CapitaLand will have $4.7 billion of assets under management in the US.

CapitaLand shares closed at $3.17 on Friday, up four cents or 1.3 per cent.

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