DOHA: Qatar Investment Authority (QIA) has entered into a joint venture with Singapore’s CapitaLand Limited’s wholly-owned subsidiary Ascott Serviced Residence(Global) Investment.
The 50:50 joint venture is to set up a US$600m serviced residence fund with an initial focus on Asia Pacific and Europe. This is Ascott’s largest private equity fund to date.
CapitaLand is one of Asia’s largest real estate companies headquartered and listed in Singapore. Asscott is CapitaLand’s serviced residence business unit.
With a target to launch six new funds with total assets under management (AUM) of up to S$10bn by 2020, the venture with QIA is part of CapitaLand’s efforts to further grow its fund management business and pursue market opportunities with a stable of blue chip capital partners, CapitaLand announced on its official website yesterday.
Lim Ming Yan, President & Group CEO of CapitaLand Ltd, said: “This tie-up with QIA is a good example of how we are proactively working with strong capital partners to build up scale.”
QIA is a global investment institution and a preferred partner of choice for investors, financiers and other stakeholders. Through the partnership in serviced residences, Ascott and QIA will each contribute $300m (S$405m) of equity funds to the venture, he said.
The fund will invest in serviced residences or rental housing properties with an initial focus on the Asia Pacific and Europe regions, for a term of 10 years with an investment period of three years. It will invest in development, redevelopment and turnkey opportunities, as well as acquire suitable projects for asset enhancement, repositioning or conversion into serviced residences and rental housing properties. Subject to pre-existing contractual obligations that Ascott has, the fund will have exclusive rights over deals that are available to Ascott during the fund’s investment period. The joint venture will also grant Ascott a first right to manage the properties that it acquires.
Lee Chee Koon, Ascott’s CEO, said: “Ascott is adopting a co-investment approach in this 50:50 strategic partnership with QIA, as a testament of our strong alignment of interest with our capital partners. As Ascott steps up on investments to expand our presence globally, this serviced residence fund will provide the financial backing to support our acquisitions and accelerate Ascott’s growth to achieve our target of 80,000 apartment units globally by 2020. We will also be able to increase our fee-based income as Ascott has the first right to manage the properties that the fund acquires.”
Ascott currently manages a $500m Ascott China Fund that invests in serviced residences across China and it was fully invested by 2011. According to the recent 2015 Fund Manager Survey, CapitaLand is the largest fund manager in Asia Pacific and ranked No.12 globally based on total real estate AUM in 2014.
