CapitaLand Investment Limited (CLI) has announced the initial close of its sixth onshore renminbi (RMB) fund, China Business Park RMB Fund III (CBPF III), with an initial equity commitment of $222 million (RMB1.2 billion). This fund aims to invest in business parks across China, focusing on high-quality assets that can generate stable returns. The fund’s first close marks a significant milestone for CLI as it continues to expand its presence in the Chinese market and strengthen its portfolio of business park assets.
CapitaLand Investment’s strategic move to invest in business parks is driven by the growing demand for high-quality commercial spaces in China. Business parks offer a conducive environment for companies to operate, with modern infrastructure and amenities that support business growth. By focusing on business parks, CLI aims to capitalize on the increasing demand for such spaces and generate stable returns for its investors.
The initial close of CBPF III has secured a major institutional investor as the fund’s anchor, demonstrating strong confidence in CLI’s investment strategy. The fund is expected to boost CLI’s funds under management (FUM) by $370 million (RMB2 billion) when fully deployed. This growth in FUM will enhance CLI’s ability to attract more investors and expand its portfolio of high-quality assets.
CLI’s commitment to investing in business parks is part of its broader strategy to diversify its portfolio and reduce reliance on any single asset class. By investing in a mix of commercial, residential, and industrial properties, CLI aims to achieve a balanced and resilient portfolio that can withstand market fluctuations.
Recapitalizing Ascendas iHub Suzhou
As part of the fund’s strategy, CLI will recapitalize Ascendas iHub Suzhou by divesting it as a seed asset to CBPF III for $259 million (RMB1.4 billion). Ascendas iHub Suzhou is a LEED Gold certified property located in the Dushu Lake Science & Education Innovation District of Suzhou Industrial Park. The property comprises four mid-rise and 11 low-rise buildings with a total gross floor area of approximately 170,800 square meters.
Since its inception in 2011, Ascendas iHub Suzhou has attracted numerous international and domestic biomedical and IT enterprises. The property is well-supported by a mix of amenities and services and is located in close proximity to Suzhou Metro Line 2. By recapitalizing this high-quality asset, CLI aims to unlock value and generate recurring fee income from managing the property.
The recapitalization of Ascendas iHub Suzhou is a testament to CLI’s disciplined capital management strategy. By recycling quality assets from its balance sheet into its RMB funds, CLI can maintain a strong alignment with its investors and partners while growing its FUM. This approach ensures that CLI remains agile and responsive to market opportunities.
Building Long-Term Partnerships
The launch of CBPF III builds on CLI’s track record of attracting and cultivating long-term partnerships with domestic investors. Since 2021, CLI has raised nearly RMB50 billion in domestic capital, demonstrating its ability to attract significant investment from local institutions. This strong network of partnerships is a key driver of CLI’s success in the Chinese market.
CLI’s focus on building long-term partnerships is reflected in its commitment to providing value-added services to its investors. By offering comprehensive asset management and investment solutions, CLI aims to deliver superior returns and build lasting relationships with its partners. This approach has enabled CLI to establish a strong presence in the Chinese market and position itself as a leading investment manager.
The success of CBPF III is a testament to CLI’s ability to execute its investment strategy and deliver value to its investors. By leveraging its expertise and network, CLI is well-positioned to capitalize on the growing demand for business park assets in China and achieve its long-term growth objectives.
