CapitaLand sets up third integrated development fund in China worth US$1.5b

IN what is the largest private capital-raising that CapitaLand Limited has undertaken, the property group has raised US$1.5 billion for its third private investment vehicle in China to invest in integrated developments.

Known as Raffles City China Investment Partners III (RCCIP III) with a life of eight years, the fund will invest in prime integrated developments in gateway cities in China.

CapitaLand will subscribe for a 41.7 per cent sponsor stake in RCCIP III while the remaining interests will be held by major investors from Asia, North America and the Middle East, including new and existing investors.

RCCIP III will be managed by CapitaLand Fund Management Pte Ltd, an indirect wholly owned subsidiary of CapitaLand.

"Following our successful partnership with Qatar Investment Authority in the serviced residence sector, RCCIP III is set to be another excellent example of how we are proactively working with strong capital partners to build up scale, while enhancing the group's returns on equity through earning fee income," said CapitaLand president and group CEO Lim Ming Yan.

Last year, CapitaLand derived S$202.1 million of fees from non-listed real estate and real estate investment trust (Reit) management activities, making up about 4 per cent of the group's revenue. It had in July last year set up a US$600 million fund in partnership with Qatar Investment Authority (QIA) to invest in serviced apartments globally.

With RCCIP III, CapitaLand now manages 16 real estate private platforms and five Reits with assets under management (AUM) worth over S$45 billion.

"RCCIP III brings us closer towards our goal of raising funds with a total AUM of up to S$10 billion by 2020," said group chief financial officer Arthur Lang.