CapitaLand plans to create Asia’s largest diversified real estate group by buying Temasek unit Ascendas-Singbridge in S$11 billion deal

Raffles City Chongqing, jointly invested by CapitaLand and Ascendas-Singbridge, is the largest single investment by any Singapore firm in China.
CapitaLand

Singapore’s CapitaLand has revealed it is entering a transaction that will see it acquire Temasek subsidiary Ascendas-Singbridge to become the largest diversified real estate group in Asia.

According to CapitaLand, the deal is valued at S$11 billion (US$8.1 billion).

On Monday (Jan 14), CapitaLand said the transaction, which is expected to be convened the first half of 2019, will boost the combined total assets under management (AUM) of the group beyond S$116 billion.

The group’s expanded asset classes will include logistics/business parks, industrial, lodging, commercial, retail and residential. Its geographical presence will span more than 180 cities across 32 countries.

In addition, it will leapfrog CapitaLand’s Year 2020 AUM target of S$100 billion, putting it amongst the top 10 real estate investment managers globally. It will also be manager of the three largest real estate investment trusts (REITs) listed on the Singapore Exchange – Ascendas Real Estate Investment Trust, CapitaLand Mall Trust and CapitaLand Commercial Trust.

Under the terms of the agreement, Temasek will receive S$6.0 billion, half of which will be satisfied in cash, and another half in CapitaLand shares.

The shares will be priced at S$3.50 per share, representing a premium of 11.3 per cent, or approximately S$0.36, over CapitaLand’s one-month volume weighted average price of S$3.1447. The consideration takes into account the adjusted net asset value of Ascendas-Singbridge , which includes the value of its fund management platform and the trading value of its three sponsored listed trusts.

Temasek’s ownership of CapitaLand will increase from approximately 40.8 per cent to about 51.0 per cent upon the close of the Transaction.

Ascendas-Singbridge provides business space solutions with a presence spanning 11 countries including Singapore, China, India, Australia, the United Kingdom and the United States.

Over 80 per cent of Ascendas-Singbridge’s S$23.6 billion AUM is in business spaces. Its flagship projects include Singapore Science Park and Changi Business Park in Singapore, International Tech Park Bangalore and International Tech Park Chennai in India, as well as Dalian Ascendas IT Park and Singapore Hangzhou Science and Tech Park in China.

Ascendas-Singbridge also manages three listed trusts, namely Ascendas Reit, Singapore’s first industrial and business space trust; Ascendas India Trust (“a-iTrust”), the first Indian property trust in Asia; and Ascendas Hospitality Trust (“A-HTRUST”), which comprises a portfolio of 14 hotels in Australia, Korea, Japan and Singapore.

Ng Kee Choe, chairman of the board of CapitaLand, said the group will provide enlarged scale, expanded capabilities and resources, and a global footprint.

Lee Chee Koon, president & group CEO of CapitaLand, said the deal with give CapitaLand “capabilities across the commercial/business space value chain, while adding a strong foothold in logistics and business parks”.

“Geographically, the deal strengthens CapitaLand’s presence in our core markets of Singapore and China, while adding meaningful scale in India, US and Europe,” he said, adding that the company’s fund management business will be strengthened by the enlarged platform.

The Transaction is subject to relevant regulatory conditions and the approval of CapitaLand’s independent shareholders.