Hongkong Land closes 0.6% lower after hitting 10-year intraday high on Singapore private fund launch

[SINGAPORE] Shares of Hongkong Land rallied in early trade on Wednesday (Feb 4), after it launched an S$8.2 billion Singapore private fund for commercial real estate.

The fund counts at least two sovereign wealth funds as investors and targets hitting a minimum of S$15 billion in gross asset value.

The counter climbed to its highest price in more than a decade at 9.01 am, rising 5.2 per cent or US$0.45 to US$9.12, with some 652,700 shares changing hands. This followed its rally from the previous trading day when the fund was announced, and it closed 4.7 per cent higher.

By 10.25 am, the shares had retreated to US$8.68, up 0.1 per cent or US$0.01, with more than 2.8 million shares traded.

The counter closed at US$8.62, down 0.6 per cent or US$0.05, with more than 6.1 million shares transacted.

Hongkong Land’s new S$8.2 billion Singapore Central Private Real Estate Fund (SCPREF) is the country’s largest commercial real estate private fund.

It has injected its one-third stakes in Marina Bay Financial Centre Towers 1 and 2, Marina Bay Link Mall and One Raffles Quay into the fund.

The fund’s initial portfolio will also contain Asia Square Tower 1, which is wholly owned by Qatar’s sovereign wealth fund, Qatar Investment Authority (QIA), as well as One Raffles Link, Hongkong Land’s first commercial development in Singapore.

Hongkong Land is the general partner and manager of the fund. It owns a majority stake at inception as a founding investor, alongside QIA and APG Asset Management.

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An established South-east Asia sovereign wealth fund, which the group declined to identify due to confidentiality obligations, has also invested in SCPREF.

Losses and capital recycling

For FY2024, Hongkong Land’s net loss widened to US$1.4 billion from US$582.3 million in FY2023.

The real estate group in September announced the sale of its Singapore and Malaysian property arm MCL Land to Malaysia’s Sunway Group for S$738.7 million. The deal came on the back of the company’s plans to recycle at least US$4 billion in capital by end-2027.

The group said that some US$150 million from the proceeds will be used to extend its share buyback programme.  

In October 2024, Hongkong Land announced plans to exit the build-to-sell residential development business and pivot towards fund management. It said then that it also plans to focus on ultra-premium integrated commercial properties in Asia’s gateway cities.