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CapitaLand's $15.9bn restructuring put in the hands of shareholders

If approved and regulatory and other third-party approvals are obtained, firm will be delisted from SGX-ST and CLI will be listed on SGX-ST by mid-September.

By João Marques Lima

Founder and Editor, The Tech Capital

4 Mins

July 21, 2021 | 12:00 AM BST

CapitaLand's $15.9bn restructuring put in the hands of shareholders

Lee Chee Koon, Group CEO of CapitaLand Group. Source: CapitaLand

Singaporean alternative asset management company CapitaLand (SGX: C31) said it is moving the decision on its US$15.9 billion restructuring to its shareholders, following board approval.

The firm has called an Extraordinary General Meeting (EGM) and a Scheme Meeting for August 10, to seek the Shareholders’ go-ahead for the Proposed Strategic Restructuring and Listing of CapitaLand Investment as announced by CapitaLand and its existing controlling shareholder CLA Real Estate Holdings Pte. Ltd.

The company said post-proposed transaction, CapitaLand’s investment management platforms, as well as its lodging business, will be consolidated into CapitaLand Investment Limited (CLI), which will be listed by introduction on the Singapore Exchange (SGX-ST); while the real estate development business of CapitaLand will be placed under private ownership, to be fully held by CLA.

Assuming that the requisite approvals from shareholders as well as regulatory and other third-party approvals are obtained, the proposed transaction is expected to be completed around mid-September 2021.  CapitaLand will be delisted from SGX-ST and CLI will be listed on SGX-ST then.

Upon listing on SGX-ST, CLI will become Asia’s largest listed real estate investment manager (REIM) and third-largest listed REIM globally with pro forma total real estate assets under management2 (RE AUM) of approximately S$115 billion (~US$84 billion) as at 31 December 2020, CapitaLand explained in a statement.

On a pro forma basis, as at 31 December 2020, CLI had approximately S$78 billion (~US$57 billion) of real estate funds under management (FUM) held via its managed listed funds and unlisted funds across the Asia-Pacific, Europe and USA.

This includes its data centre portfolio, comprised of four data centres in Singapore, 11 in Europe, one in China and one in India. Additionally, CapitaLand is the fund and asset manager for the development of a data centre in Korea.

One of its largest investments in data centres dates back to June 2019, when it acquired Ascendas Pte Ltd and Singbridge Pte. Ltd., creating one of Asia’s largest diversified real estate groups with over S$123 billion (~US$89.87 billion) of assets under management at the time. Ascendas has recently served as a vehicle to commit S$216.6 million (US$161.02 million) into the development of India data centres taking CapitaLand’s total investments in the sector to date to US$1.2 billion.

Lee Chee Koon, group CEO of CapitaLand Group, said of the business’ restructuring “This restructuring is a logical next step to accelerate the growth of CapitaLand’s businesses and drive greater shareholder value.  Since announcing the Proposed Transaction, we have wasted no time in charting CLI’s growth as a leading global REIM. 

“Since the start of the year, we have increased FUM by over S$1 billion as at 31 March 2021, with a focus on new economy assets; while announcing over S$11.2 billion in gross divestments year-to-date, three times higher than our annual recycling target of S$3 billion. 

“We grew fee-related earnings (“FRE”) by originating new fund products and strengthened our investment pivot towards longer-stay accommodation assets.  At the same time, we successfully registered ourselves as a private equity fund manager in China.  All these initiatives are already contributing to net asset value (“NAV”) upside for CLI. 

“CapitaLand’s share price has been performing positively since the transaction announcement, which signals a supportive market reception to the Proposed Transaction.  Moving forward, we have outlined a robust investment roadmap to achieve sustainable FUM and FRE growth to maximise CLI’s potential.”

Following the announcement of the EGM, shares of CapitaLand inched 1.84%, up seven cents to S$3.88, with over 18 million shares being traded within 24 hours of the news.

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João Marques Lima

Founder and Editor, The Tech Capital

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