CapitaLand has announced the proposed merger of CapitaLand Mall Trust (CMT) and CapitaLand Commercial Trust (CCT) to create CapitaLand Integrated Commercial Trust (CICT). With the proposed merger, CapitaLand Group will have in its stable of sponsored trusts, three best-in-class real estate investment trusts listed on the Singapore Exchange (S-REIT), with global or developed market mandates, namely: CICT, Ascendas Real Estate Investment Trust (Ascendas Reit) and Ascott Residence Trust (ART).
CICT is expected to become the third-largest REIT in Asia Pacific (APAC) with a market capitalisation of approximately S$16.8 billion and a combined property value of approximately S$22.9 billion. As the largest S-REIT, CICT will be CapitaLand’s primary investment vehicle for commercial real estate in Singapore and other developed markets.
Post the proposed merger, Ascendas Reit, CapitaLand’s global business park and logistics REIT, is the second-largest S-REIT with a market capitalisation of S$11.3 billion4. ART is leading the Asia-Pacific region as the largest4hospitality trust after its successful combination with Ascendas Hospitality Trust in 2019.
Complementing this, Ascendas India Trust, CapitaLand Retail China Trust and CapitaLand Malaysia Mall Trust will continue to be CapitaLand’s specialist investment vehicles in the emerging markets of India, China and Malaysia respectively.
Mr Lee Chee Koon, Group CEO of CapitaLand Group, said: “CapitaLand believes that this merger, integrating CMT’s retail portfolio with CCT’s office portfolio, is strategically compelling and timely. This merger, upon completion, will offer investors the options to invest in three global, developed market platforms in our core asset classes, and in three specialist emerging market platforms, to suit their specific preferences and risk appetite. CapitaLand is delighted to see CICT’s elevation to a top three APAC REIT by market capitalisation. Together with Ascendas Reit which is ranked eighth largest in APAC, we are proud to be playing a key role in raising the profile of Singapore as the preferred listing destination for REITs, at the same time offering global investors similar scale and liquidity on par with the largest REITs in the APAC region.”
“This merger, upon completion, will offer investors the options to invest in three global, developed market platforms in our core asset classes, and in three specialist emerging market platforms, to suit their specific preferences and risk appetite.”
Mr Lee added: “Our REITs platform is core to CapitaLand’s strategy to enhance returns and grow assets under management. We are the single largest unitholder of all our sponsored trusts which are also our preferred investment platform. CapitaLand is committed to support the continuous advancement of these REITs and develop them into robust growth engines with well-balanced and diversified portfolios, with a view to preserve long term value for and deliver sustainable returns to all unitholders.”
Mr Jonathan Yap, President, CapitaLand Financial, CapitaLand Group, said: “CICT’s enlarged scale and enhanced resilience will appeal to investors who want to invest in the largest proxy REIT for best-in-class Singapore commercial real estate. CICT will have the ability to supercharge its growth further with bigger-sized acquisitions – which can include undervalued opportunities in Singapore as well as accretive investments in other developed markets. We see more of such opportunities within CMT and CCT’s existing portfolios. The merger would allow these and other market opportunities to be pursued more efficiently. Alongside other unitholders, CapitaLand stands to benefit from the value of our stake in CICT while retaining the possibility to co-participate in the developments directly, where appropriate. It will be a strong demonstration of CapitaLand’s two-pronged strategy of growing via development profits as well as recurring income through our fund management platform.”
The redevelopment of Funan DigitaLife Mall in Singapore is an example of portfolio value enhancement by transforming a single-use asset into an integrated development. The redeveloped Funan integrated development comprises retail, office and coliving components. Upon completion in June 2019, Funan’s property value more than doubled to S$751 million. Similarly, the ongoing redevelopment of Golden Shoe Car Park into CapitaSpring integrated development with office, serviced residence, food centre and ancillary retail, is expected to achieve an increase of 12 times in property value to S$1.82 billion upon completion in 2021.
CapitaLand is currently ranked as the ninth largest real estate investment manager globally and top in Asia5. The total market value of CapitaLand, including the various listed entities within the Group, is over S$57 billion. CapitaLand is also active in private fund management business. Several private funds were created over the last 12 months, contributing to the S$23.8 billion of private fund asset under management currently. The existing private funds cover a wide range of styles such as core, value-add and development, and invest across countries where CapitaLand has strong ground presence. There are plans to create more private funds and along with the listed fund business, CapitaLand is targeting to grow its fund asset under management from the current S$71.7 billion to S$100 billion by 2024.