Hongkong Land launches $8.2 billion private real estate fund in Singapore
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The fund will focus primarily on managing prime commercial assets and acquire additional high-quality, income-producing commercial assets in the CBD and Orchard Road precinct.
ST PHOTO: LIM YAOHUI
SINGAPORE - Property developer Hongkong Land has launched a private real estate fund with $8.2 billion of assets under management (AUM) at inception.
The Singapore Central Private Real Estate Fund (SCPREF) is the largest office-focused private investment fund in the Republic and among the largest Asia-focused funds by AUM in the market, according to the company on Feb 3.
The fund will focus primarily on managing prime commercial assets and acquire additional high-quality, income-producing commercial assets in Singapore’s Central Business District and Orchard Road precinct.
SCPREF’s initial portfolio comprises Asia Square Tower 1 (100 per cent interest), Marina Bay Financial Centre (MBFC) Tower 1 and Tower 2 and Marina Bay Link Mall (33.3 per cent interest), One Raffles Quay (33.3 per cent interest) and One Raffles Link (100 per cent interest).
The fund is part of Hongkong Land’s strategy announced in October 2024 to recycle capital from its prime real estate assets, in turn providing a platform to acquire new ultra-premium integrated commercial properties in Singapore.
Hongkong Land, holding a majority stake at inception, will act as fund manager, responsible for executing SCPREF’s investment mandate, and as property manager, overseeing day-to-day operations.
Along with Hongkong Land, Qatar Investment Authority and APG Asset Management are also founding investors in the fund. Another investor is a South-east Asia sovereign wealth fund, which Hongkong Land declined to name.
Speaking at a virtual media briefing on Feb 3, chief executive Michael Smith said that the fund will be an open-ended fund that does not have a fixed term, allowing new investors to join.
The fund is currently in discussions to bring in additional institutional investors.
Hongkong Land said that its stake at inception is above 50 per cent and it will not go lower than 30 per cent. SCPREF also provides a boost for Hongkong Land to achieve its target of US$100 billion (S$127 billion) AUM by 2035.
Mr Smith said that the fund will help the firm hit about US$50 billion of its 2035 target. “We’re around halfway there. And a lot of that US$50 billion is Hong Kong Central, which we own 100 per cent in our balance sheet. We still have a bit of a journey between now and 2035, but it’s a great start,” he said.
The launch of SCPREF, with its current committed capital, and the net proceeds from the sale of MBFC Tower 3 have enabled Hongkong Land to receive net proceeds of US$1.3 billion of capital. This lifts the total proceeds from recycling activities since 2024 to US$3.4 billion – over 80 per cent of its 2027 US$4 billion target.
The additional recycled capital will be used to improve shareholder returns, strengthening the balance sheet as the company looks for new investment opportunities aligned with its strategy.
The firm’s share buyback programme will be boosted by an additional US$300 million, bringing the total amount allocated to the programme to US$650 million since 2024, reflecting approximately 20 per cent of the US$3.4 billion capital recycled to date.
The extended buyback programme will be activated after the release of the company’s 2025 annual results, which is scheduled for March 5, 2026. It will continue through June 30, 2027.
Hongkong Land plans to cancel any shares that are repurchased, reducing the number of outstanding shares in issuance.
“(We have) a number of initiatives, great assets, great investors alongside us, and a great way of recycling capital to buy back what we still believe is undervalued shares,” Mr Smith noted.
Hongkong Land on Dec 12 had announced that it would inject its interests in One Raffles Quay and MBFC Towers 1 and 2 into the new real estate vehicle sale of its one-third stake in MBFC Tower 3
Singapore-listed shares of Hongkong Land rose 4.71 per cent to US$8.67 on Feb 3.
