Breaking News

CapitaLand bets on new markets with $4.4 billion Temasek real estate deal

Stock MarketsJan 14, 2019 05:35AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. A Temasek logo is seen at the annual Temasek Review in Singapore

By Anshuman Daga and Aradhana Aravindan

SINGAPORE (Reuters) - Singapore's CapitaLand (SI:CATL) is forking out S$6 billion ($4.4 billion) to scoop up logistics and industrial assets from state investor Temasek, in a deal the developer said would create Asia's largest real estate investment manager.

CapitaLand will buy the holding companies of the business of the Ascendas-Singbridge Group, which manages Ascendas Real Estate Investment Trust (SI:AEMN), Ascendas India Trust (SI:AINT) and Ascendas Hospitality Trust (SI:ASHP), for cash and stock. Ascendas-Singbridge also manages private funds.

The transaction, which will give CapitaLand exposure to high-growth technology and e-commerce sectors, marks the biggest consolidation in Singapore's fragmented real estate investment trust sector. Temasek's stake in CapitaLand will rise to about 51 percent after the deal closes from roughly 40.8 percent.

CapitaLand's global businesses span shopping malls, lodging, offices, homes, real estate investment trusts (REITs) and funds. CEO Lee Chee Koon, who took charge in September, has been looking for deals to boost the group's growth.

The Temasek (TEM.UL) deal will help CapitaLand diversify and give it a footing in new markets, analysts said.

"Industrials, which are being driven up due to e-commerce demand, is an area CapitaLand sorely lacked. CapitaLand's retail mall business was also coming under a lot of pressure due to e-commerce," said Wong Yew Kiang, an analyst at CLSA.

"Industrial asset class needs scale, you have to buy a big portfolio in one go if you want to make yourself relevant," said Wong, adding investors could, however, be worried as the deal was coming when valuations had run up a fair bit and interest rates were set to increase.

The deal with Temasek's subsidiary will add logistics assets and data centers to CapitaLand's portfolio, cushioning it against increased challenges in some segments, including retail and housing in Singapore.

"This deal gives CapitaLand many more options for where growth could come from. This is part of the new CEO's vision of making CapitaLand a more global and diversified player," a person familiar with its strategy said.

The enlarged group will have total assets under management of over S$116 billion, making it the ninth biggest global real estate investment manager and just behind UBS Asset Management and CBRE Global Investors, CapitaLand and Ascendas-Singbridge said in a joint statement on Monday.

The deal will push CapitaLand ahead of its target to grow its assets under management to S$100 billion by 2020.

"This particular transaction will give us meaningful scale in key growth markets like India, which brings a lot of promise and excitement," CEO Lee said.

In a message to employees for 2019, Lee had cautioned against CapitaLand "continuing with the status quo".

"Companies either thrive, survive, or erode, especially in a world that is constantly changing. This is a time when it is dangerous to stay contented," he had said.

Temasek will effectively receive about S$6 billion, half in cash and half in new CapitaLand shares as part of the deal.

Temasek's divestment plans come just days after a source said it was in talks to sell a small portion of its 24.9 percent stake in beauty and health retailer A.S. Watson.

J.P. Morgan is the sole financial adviser to CapitaLand.

Trading in shares of CapitaLand and some of its listed REITs, and Ascendas-Singbridge's REITs, was halted ahead of the announcement.

CapitaLand bets on new markets with $4.4 billion Temasek real estate deal

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email