Singapore

CAPITALAND on Monday said it has formed a programmatic joint venture (JV) to acquire and develop multifamily assets totalling US$300 million in the US.

The JV will invest in assets in the South-east and South-west markets of the US, with an initial focus on Austin, Texas, the property giant said in a press statement.

The partner is an Austin-based real estate investment, development and property management firm, which has developed over 25,000 multifamily units in the US since its inception 25 years ago, CapitaLand said.

A freehold land parcel in Austin has been acquired as the first project, with CapitaLand holding an 80 per cent stake and the JV partner holding the remainder. The 4.71-acre land parcel will be developed into a mid-rise and green 341-unit suburban multifamily property, with completion expected in 2023.

According to CapitaLand, the property is situated close to commercial, residential and leisure activities. The upcoming development is also adjacent to the McKalla Place Major League Soccer Stadium, which is slated to open in Spring 2021.

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Designed to cater to residents in a post Covid-19 landscape, the property will have features such as keyless entry to the apartments, as well as smart home features. It will also offer a mix of studios, one- and two-bedroom apartments with separate work and living areas for residents to work from home, CapitaLand noted.

Dang Phan, managing director for the US at CapitaLand International, noted that across the US, multifamily rents have recovered faster than other asset types during past recessions.

"Prior to Covid-19, allocation of investment capital towards the multifamily sector has exceeded that of other property types and the pandemic has accelerated this preference. Growing our investment in the resilient, liquid and stable-yielding multifamily portfolio will provide income stability."

He added that despite the pandemic, Austin continues to be an "attractive technology, business, government and investment hub with a steady outlook".

"Austin's business-friendly policies, high quality of life and skilled workforce have attracted major technology and Internet companies such as Amazon, Apple, Google, IBM, Oracle and Tesla to set up substantial operations in the city... The demand for quality housing has risen correspondingly, with rents increasing 50 per cent over the past decade," said Mr Phan.

Jason Leow, president of Singapore & International at CapitaLand Group, noted that the latest acquisition adds to CapitaLand's portfolio of 16 freehold suburban multifamily properties, which it acquired in 2018.

With this new investment, CapitaLand will have S$4.7 billion of assets under management in the US.

Shares in CapitaLand fell two cents, or 0.63 per cent, to close at S$3.15 on Monday.