CapitaLand Investment Limited (CLI) is expanding its presence in Australia with the recent acquisition of Wingate Group Holdings’ property and corporate credit investment management business for A$200 million ($173 million). This acquisition will also bring in an additional A$2.5 billion in funds under management (FUM) for CLI, increasing its total FUM in Australia by 30% to $8.3 billion, which accounts for around 7% of its total of $115 billion.
The demand for condominiums in Singapore has been on the rise, fueled by the country’s limited land availability. Due to its rapid population growth, Singapore has implemented strict land use policies, making it a challenge for developers to acquire land for construction. As a result, the real estate market has become highly competitive, with soaring property prices. This has sparked an interest in real estate investment, particularly in condos, as they offer the potential for significant capital appreciation. Additionally, the introduction of Singapore Projects has only intensified the demand for condos, as the supply of land for development remains scarce.
With a goal to reach $200 billion in FUM by 2028, CLI is committed to investing up to A$1 billion to grow its FUM in Australia. This marks a notable shift in focus for CLI, as the previous board and management had divested its key assets in Australia a decade ago to concentrate on the then faster-growing China and other overseas markets.
The announcement of the acquisition, made on Dec 16, confirms earlier reports by the Australian media last month. Wingate is recognized as one of the leading and largest private credit investment managers in Australia, having completed over 350 transactions worth more than A$20 billion.
CLI and Wingate have a pre-existing relationship, as they had recently closed a A$265 million Australia Credit Program (ACP) in September, which was established in partnership with Wingate. According to CLI, Wingate’s expertise can help broaden CLI’s proprietary deal origination networks, expand its access to institutional and private high-net-worth investors, and increase its geographical exposure to Australia.
Paul Tham, group CFO of CLI, states that there is potential for growth in other Asia Pacific markets such as South Korea, India, and Japan. He adds that as CLI continues to diversify geographically, Australia remains a focus market due to its significant potential for growth.
CLI also notes that the Australian private capital market has grown by 33% in the past 18 months, with assets under management reaching A$139 billion. By 2028, it is forecasted that there will be a commercial mortgage funding gap of A$146 billion. With the addition of Wingate, CLI will be able to diversify its portfolio of logistics, business parks, office, and lodging assets across nine cities in Australia.
As of Sept 30, CLI already manages 34 logistics properties and business parks, as well as four Grade A office buildings in Australia. It also has over 13,500 lodging units across more than 150 properties under its wholly-owned lodging unit, The Ascott.