CapitaLand and Ascendas-Singbridge from Singapore entered a S$11 billion ($8.13 billion) deal to create Asia’s largest diversified real estate group.
CapitaLand Limited (CapitaLand) announced on January 14, 2019 that it has entered into a transaction with Temasek to acquire from its subsidiary, Ascendas-Singbridge Pte., Ltd. (ASB), all the shares in the two wholly-owned intermediary subsidiaries of ASB (the group), which will create the largest diversified real estate group in Asia.
The proposed transaction is valued at S$11 billion ($8.13 billion) and is subject to approval by CapitaLand’s independent shareholders at an Extraordinary General Meeting (EGM), expected to be convened in the first quarter of 2019.
Post transaction, the combined total assets under management (AUM) of the group will exceed S$116 billion ($85.8 billion).
The group’s expanded asset classes will include logistics, business parks, industrial, lodging, commercial, retail and residential real estate.
Its geographical presence will span more than 180 cities across 32 countries. In addition, the group will leapfrog CapitaLand’s 2020 AUM target of S$100 billion ($73.98 billion), putting it amongst the top 10 real estate investment managers globally, as well as the manager of the three largest real estate investment trusts (REITs) listed on the Singapore Exchange, namely Ascendas Real Estate Investment Trust, CapitaLand Mall Trust, and CapitaLand Commercial Trust.
Raffles City Chongqing, jointly invested by CapitaLand and Ascendas-Singbridge, is the largest single investment by any Singaporean firm in China.
Temasek’s ownership of CapitaLand will increase from approximately 40.8 per cent to about 51.0 per cent upon the closing of the transaction.
ASB is Asia’s leading provider of business space solutions. Headquartered in Singapore, ASB’s business presence spans 11 countries, including Singapore, China, India, Australia, the United Kingdom, and the United States (US).
Over 80 per cent of ASB’s S$23.6 billion AUM is in business spaces, more than half of which – approximately S$12.4 billion ($9.17 billion) – is in the new economic sectors of logistics, business parks, and data centres.
Its flagship projects include Singapore Science Park and Changi Business Park in Singapore, International Tech Park Bangalore, and International Tech Park Chennai in India, as well as Dalian Ascendas IT Park and Singapore Hangzhou Science and Tech Park in China.
ASB also invests in, develops, and manages large-scale sustainable urban developments in the region.
These projects include Sino-Singapore Guangzhou Knowledge City, Singapore-Sichuan Hi-Tech Innovation Park, and the Sino-Singapore Jilin Food Zone.
Commenting on the transaction, Ng Kee Choe, chairman of the board of CapitaLand Limited, said that CapitaLand was very enthusiastic about this transformational transaction and the prospect of growing the combined platforms into a leading global real estate group.
“Our complementary strengths position us strongly for growth amidst the changing real estate environment in Singapore and internationally. With enlarged scale, expanded capabilities and resources, and a global footprint, we look forward to delivering high-quality growth sustainably. This transaction represents a compelling opportunity to realise benefits not available to each company on a standalone basis: we will have more opportunities to create enhanced value for our shareholders,” Choe said.
Wong Kan Seng, chairman of Ascendas-Singbridge Pte., Ltd., said that as Asia’s leading integrated business space and innovative urbanisation solutions provider, ASB’s rapidly growing business is highly complementary to CapitaLand’s.
“The combined scale and expertise of the group will enable it to better capitalise on the opportunities arising from the rapid pace of urbanisation in the region,” Seng said.
According to Lee Chee Koon, president & group CEO of CapitaLand, as CapitaLand continues its leadership in residential, retail, and lodging, the combined platforms will give them capabilities across the commercial and business space value chain, while adding a strong foothold in logistics and business parks.
Meanwhile, Miguel Ko, executive director and group CEO of Ascendas-Singbridge, said that ASB’s strong financial track record, its expertise in handling large scale projects profitably, and its access to sizeable contiguous land bank across core markets, will become strong contributors to the group’s performance.
Vietnam is one of the major markets of CapitaLand in Asia. CapitaLand now has projects in seven cities and provinces of Vietnam, including Ho Chi Minh City, Hanoi, Haiphong, Halong, Danang, Binh Duong, and Nha Trang. The company so far offered more than 8,600 residential units in 15 projects, 6,300 serviced apartments in 27 projects, two integrated developments, and a portfolio of around $1 billion across seven major cities in Vietnam.