Cap­i­taLand inks US$4.4bil agree­ment with Te­masek

The Star Malaysia - StarBiz - - Front Page -

SIN­GA­PORE: Cap­i­taLand Ltd’s new chief Lee Chee Koon has wasted no time putting his mark on the Sin­ga­pore de­vel­oper, strik­ing a S$6bil (US$4.4bil) deal with Te­masek Hold­ings Pte to cre­ate what he says will be Asia’s largest di­ver­si­fied real es­tate com­pany.

Cap­i­taLand would pay a mix of cash and new stock for Te­masek units As­cen­das Pte and Sing­bridge Pte, bol­ster­ing its as­sets to more than S$116bil spread across 180 cities in 32 coun­tries, it said in a state­ment.

Lee, the 43-year-old who took the top job in Septem­ber, is steer­ing Cap­i­taLand deeper into new mar­kets such as the United States and Europe, as well as ex­pand­ing the de­vel­oper’s reach in Sin­ga­pore.

The trans­ac­tion vaults the com­pany over a 2020 tar­get for as­sets un­der man­age­ment of S$100bil as it moves into ar­eas that can pro­vide a buf­fer for when other more tra­di­tional parts of the real es­tate in­dus­try soften. They in­clude lo­gis­tics cen­ters, which are tied to the growth of e-com­merce, and busi­ness parks.

“The deal ben­e­fits Cap­i­taLand in two ar­eas – as­sets un­der man­age­ment and di­ver­si­fi­ca­tion,” said Marc Tan, a re­search an­a­lyst at KGI Se­cu­ri­ties Pte. More as­sets mean a boost to fees and rental in­come, while a larger geo­graph­i­cal foot­print pro­vides sta­bil­ity, he said.

It also lifts Te­masek’s stake in Cap­i­taLand to a ma­jor­ity, from 40.8% to about 51%. That in­creased own­er­ship will “be pos­i­tive for bond­hold­ers look­ing for strong in­sti­tu­tional back­ers,” Tan said.

Lee is charged with scal­ing up Cap­i­taLand’s real es­tate ca­pa­bil­i­ties across as­set classes and ge­ogra­phies, po­si­tion­ing the group to bet­ter ride out the eco­nomic and tech­no­log­i­cal changes. Prior to be­ing ap­pointed group CEO, Lee was head of The As­cott Ltd, an in­ter­na­tional ser­viced res­i­dence owner-op­er­a­tor. He joined Cap­i­taLand in 2007.

Prop­erty mar­kets from Syd­ney to Van­cou­ver have staged a col­lec­tive cor­rec­tion over the past few months as gov­ern­ment cool­ing mea­sures bite and the specter of ris­ing in­ter­est rates dents in­vestor con­fi­dence. Sin­ga­pore hasn’t been im­mune with home prices on the is­land post­ing their first drop in six quar­ters in the three months ended De­cem­ber.

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