CapitaLand's first closing of debt fund raises over 70% of $1b target

CapitaLand's Raffles City Chongqing. The Credo I China fund will invest in offshore US dollar-denominated subordinated instruments for real estate in China's first-and second-tier cities.
CapitaLand's Raffles City Chongqing. The Credo I China fund will invest in offshore US dollar-denominated subordinated instruments for real estate in China's first-and second-tier cities.PHOTO: CAPITALAND

CapitaLand announced the first closing of the group's debut discretionary real estate debt fund, with a target capital raise of US$750 million (S$1 billion).

It has raised over 70 per cent of the capital, or US$556 million, for the fund's first closing, with subsequent commitments from major institutional investors expected later this year, it said.

The Credo I China fund will invest in offshore US dollar-denominated subordinated instruments for real estate in China's first-and second-tier cities, the group said in an exchange filing yesterday morning before the market opened.

It added that the fund will focus on loans and securities of "high-quality real estate covering commercial, retail, residential, logistics and industrial properties".

The property developer will hold a 10 per cent stake in the fund, which is set to be one of China's largest real estate debt funds, according to the group.

CapitaLand president and group chief executive officer Lee Chee Koon said the group is delighted with the strong investor participation in the fund, and that its fund management business is an integral part of CapitaLand's strategy.

"Credo I China will broaden CapitaLand's fund offerings to real estate debts, going beyond our existing 15 private equity funds, which focus primarily on direct investment in property projects," he added.

  • 10%

  • Stake that CapitaLand will hold in the fund, which is set to be one of China's largest real estate debt funds, according to the group.

Separately, CapitaLand's president for China and investment management, Mr Lucas Loh, said the fund comes at an opportune time as a "significant volume of China's commercial real estate loans are due for refinancing within the next few years, while bank regulatory changes and deleveraging measures have tightened the amount of credit available to borrowers, prompting them to turn to non-bank lenders".

He added that the Credo I China fund will also augment CapitaLand's business in China through investment in real estate debts.

A version of this article appeared in the print edition of The Straits Times on February 28, 2019, with the headline 'CapitaLand's first closing of debt fund raises over 70% of $1b target'. Print Edition | Subscribe