Temasek-backed property behemoth, CapitaLand, announced Monday that it would restructure its various property businesses, consolidating the group’s investment management platforms and lodging business, into a new entity, CapitaLand Investment Management (CLIM).
CLIM will be listed on the Singapore Exchange and with assets under management of around S$115bn ($86bn), CLIM is expected to be the largest real estate investment manager (REIM) in Asia, and the third largest listed REIM company globally.
CLIM at its inception will be a fully integrated REIM with funds and property management capabilities across multiple asset classes and a spectrum of private and listed funds. The managers of all the listed real estate investment trusts (REITs) and business trusts, as well as selected unlisted funds currently managed by CapitaLand, will be held under CLIM.
As part of the proposed scheme, CapitaLand will distribute approximately 48% of CLIM shares to existing shareholders, excluding CLA, and will retain a 52% ownership of the new entity.
Eligible shareholders are expected to receive S$4.102 per share in cash and scrip for each CapitaLand share they own. This is 24% above the last traded price of CapitaLand and represents a premium of 27% to the one-month volume-weighted average price (VWAP)
CapitaLand will also distribute 388.2 million units in CapitaLand Integrated Commercial Trust (CICT) to shareholders (excluding CLA) reducing its current 28.9% stake in CICT to 22.9%.
As part of the restructuring CapitaLand plans to place its property development business into private ownership under the control of its major shareholder CLA Real Estate Holdings. CLA is itself a wholly owned subsidiary of Temasek, an investment holding company owned by the Government of Singapore. CLA is the largest shareholder of CapitaLand, holding a 52% stake.
The newly privatised real estate development business has a pro forma Net Asset Value (NAV) of about S$6.1bn ($4.55bn) and will act a project developer and incubator, providing a pipeline of opportunities for the newly created REIM.
Mr Ng Kee Choe, Chairman of CapitaLand Limited, said, “Significant progress has been made in the last few years to pivot CapitaLand from a largely traditional development-focused business to one that is more asset-light and fee-income driven. This proposed restructuring is a significant and important milestone in CapitaLand’s transformation. It will provide the impetus for us to further expand and scale up our asset and investment management, and lodging businesses whilst benefitting from the pipeline of projects from CapitaLand as part of the ecosystem. It will also extend our market leadership in the Asian real estate investment management business.”
