CapitaLand Investment Limited (CLI) has established two new onshore RMB funds to invest in business park opportunities in China. These are CLI’s first business park private funds in the country.
The first, China Business Park Core RMB Fund I (CBPCF I), is a RMB380 million ($76 million) fund that was established with four domestic investors.
CBPCF II, the second fund, is a RMB3.6 billion fund that was established with six domestic investors.
According to CLI, it has raised RMB3.2 billion in third-party capital for the two funds.
The new funds will add over RMB8.2 billion to CLI’s funds under management (FUM) when fully deployed. The group will hold a 10% stake in the first fund, and a 20% stake in the second one.
CBPCF I has acquired Ascendas i-Link, a business park in Zhangjiang Hi-Tech Park in Pudong New District, Shanghai from CLI, which will continue to manage the asset. CLI will also manage the single-asset fund.
See also: CapitaLand Investment establishes first onshore RMB fund in China
Zhangjiang Hi-Tech Park is one of China’s first state-level hi-tech zones approved by the State Council. The park houses many top Chinese technology enterprises and Fortune 500 companies.
CBPCF II will invest in a Leadership in Energy and Environmental Design (LEED) Gold-certified business park in China. The fund expects to complete the acquisition by end-2022. CLI will co-manage the fund with an asset management company, an affiliate of one of the anchor investors.
According to CLI, both assets are quality core income-generating properties with close to an occupancy rate of 100%.
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“With the launch of our first RMB fund in June 2022 and now with CPBCF I and CPBCF II, CLI has raised close to RMB4 billion of onshore capital from Chinese institutional investors. Our close to 30 years of on-the-ground experience and strong fund and asset management track record in China have enabled us to tap domestic capital to support our onshore investment management activities. Leveraging our deal-sourcing capabilities, we secured a quality office asset, which was a special situation opportunity, for our first RMB fund,” says Puah Tze Shyang, CEO of CLI China.
“We are expanding our RMB funds to acquire business parks which have proven to be resilient in operating performance. We remain confident in the long-term prospects of China given the size of its economy, and will continue to leverage the increasing pool of domestic capital to grow our business in China,” Puah adds.
Simon Treacy, CEO of private equity real estate, real assets at CLI, says, “CLI is accelerating its onshore RMB capital raising momentum at a time when it is becoming increasingly important for investment managers to build up domestic fund-raising capabilities. CBPCF I and CBPCF II bring 10 new investors including securities firms, trust companies, state-owned enterprises and insurers into CLI’s network of capital partners. They demonstrate our ability to execute our growth strategies whilst diversifying our capital pool with high quality Chinese partners.”
Treacy adds: “As a global real estate investment manager with an intimate knowledge of China, CLI is able to source for opportunities and structure unique deals that will deliver sustainable quality returns for onshore investors. Besides business parks, we see potential to invest in other new economy assets such as data centres and logistics in China through our private funds. The expansion of our private fund management business, which is a key growth driver for CLI, will further strengthen CLI’s asset-light and capital-efficient business model.”
Shares in CLI closed 2 cents lower or 0.65% down at $3.08 on Nov 2.
