From war chest to growth: Hongkong Land eyes new investments after US$3.6 billion capital recycling
The group is ‘very positive’ on the Singapore market, and looks to expand its presence through the new private fund or development opportunities
[SINGAPORE] Hongkong Land is preparing to ramp up new investments after recycling US$3.6 billion of capital as the property group moves to boost earnings and shareholder returns.
Speaking to The Business Times, Hongkong Land chief financial officer Craig Beattie said that having recycled 90 per cent of its US$4 billion target and cut net debt by 30 per cent, the group now has ample balance-sheet headroom for new investments.
In September last year, it sold its Singapore and Malaysian property arm MCL Land for S$738.7 million in cash. Most of the proceeds went to building a “war chest for future endeavours”, such as growing its ultra-premium integrated commercial projects in Hong Kong, Shanghai, Singapore and other Asian gateway cities.
The group expects to see another US$1.5 billion from winding down the remainder of its build-to-sell business over the next three to four years, said Beattie.
Hongkong Land is “very positive” on Singapore, and is looking to expand through its private fund or by pursuing development opportunities. “The fund is quite clearly focused on prime central business district (assets) in Singapore, so anything within that broader area, we are positive about because of the supply and demand dynamics,” he said.
Among office assets reportedly on the market is Khazanah Nasional and Temasek’s Marina One, which is said to be asking between S$5 billion and S$6 billion.
Beattie acknowledged that any prime asset in the Marina Bay area would naturally undergo due diligence. “We’ll just need to see how things play out,” he said.
Other markets Hongkong Land hopes to expand into include Seoul, Tokyo and Sydney.
The group is working on “some early stage opportunities”, and “hopefully we can make some positive announcements later this year”, he added.
An internal restructuring, announced last week, will focus strategy on four core portfolios: the Singapore fund, Hong Kong Central, West Bund in Shanghai, and assets in mainland China.
Each portfolio now has its own chief executive, Beattie said, and some could be structured into funds. These include a private or listed fund in China as assets stabilise.
