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CapitaLand’s first discretionary property debt fund, CREDO I China, witnessed its first closing, in which it raised more than US$556 million (approx. S$749.54 million), according to an SGX filing on Wednesday (27 Feb).
With a targeted capital of US$750 million (approx. S$1 billion), it is expected to become one of China’s biggest discretionary debt funds. Major institutional investors have also promised to inject additional capital later this year, and CapitaLand will control a 10 percent stake in CREDO I China.
In particular, the fund will be invested in US dollar-denominated subordinated financial instruments secured by various properties in first- and second-tier cities. These include Beijing, Shanghai, Hong Kong, Xi’an, Wuxi, Wuhan, Tianjin, Suzhou, Shenzhen, Nanjing, Hangzhou, Guangzhou, Dongguan, Chongqing and Chengdu.
The fund will be spent on loans and securities backed by residential, offices, logistics, retail and industrial properties.
“CREDO I China will broaden CapitaLand’s fund offerings to real estate debts, going beyond our existing 15 private equity funds, which focus primarily on direct investment in property projects,” said CapitaLand’s President and Group CEO, Lee Chee Koon.
Lucas Loh, CapitaLand’s President for China and investment management, added: “CREDO I China comes at an opportune time as a significant volume of China’s commercial real estate loans are due for refinancing within the next few years, while bank regulatory changes and deleveraging measures have tightened the amount of credit available to borrowers, prompting them to turn to non-bank lenders.”
Singapore-based CapitaLand is touted as one of the largest property firms in Asia with a market capitalisation of around S$13 billion as at the end of 2018. It also owns and manages a global portfolio of real estate collectively worth over S$100 billion.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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