CLI establishes two onshore renminbi funds totalling 4b yuan for business parks

CAPITALAND Investment (CLI) has established two onshore renminbi funds totalling around four billion yuan (S$796 million) to invest in business park opportunities in China. 

These are CLI's first two private funds for business parks in China and will add over 8.2 billion yuan to its funds under management (FUM) when fully deployed, the property player said on Thursday (Nov 3). 

To date, it has raised 3.2 billion yuan in third-party capital for the two funds, which have medium to long-term horizons, coined China Business Park Core RMB Fund (CBPCF) I and CBPCF II.

CLI will also hold a respective 10 per cent and 20 per cent stake in the funds, in partnership with new domestic investors, as part of its asset-light strategy to grow the company's FUM, it added. 

CBPCF I, which is worth 380 million yuan, will be a single-asset fund managed by CLI. At the time of the announcement, CLI said it had already secured Ascendas i-Link, a business park in Shanghai's Zhangjiang Hi-Tech Park, which houses several Chinese technology enterprises and Fortune 500 companies. 

Meanwhile, CBPCF II will be co-managed with an asset management company that is an affiliate of one of the anchor investors, said CLI. 

The fund, which is worth 3.6 billion yuan, will invest in an undisclosed business park in a tier-1 Chinese city. CLI added that the business park has also received a gold rating under the United States Green Building Council's Leadership in Energy and Environmental Design.

CLI expects the acquisition to be completed by end-2022, with assets under the two funds holding close to 100 per cent occupancy. 

Simon Treacy, chief executive officer of private equity real estate and real assets at CLI, highlighted that the two funds will bring 10 new investors - including securities firms, trust companies, state-owned enterprises and insurers - into the company's "network of capital partners", building its domestic fundraising capabilities. 

Business parks support China's medium to long-term industrialisation development targets and have "proven to be resilient through various market cycles", according to CLI. But Treacy added that CLI does not intend to stop there.

"We see potential to invest in other new economy assets, such as data centres and logistics, in China through our private funds," he said. "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." 

As at Jun 30, CLI has a total of 10 private investment vehicles in China holding 28 properties with FUM of S$20.6 billion. In total, CLI has a portfolio of more than 200 properties across over 40 Chinese cities, with total assets under management of S$46 billion in China. 

Shares of CLI were trading 0.3 per cent lower, or S$0.01, at S$3.08 as at 9.20 am on Thursday.

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