It has also built a diversified portfolio of more than 40 IT and business parks, industrial, logistics, lodging and data centre assets across India

 

[SINGAPORE] CapitaLand Investment (CLI) holds a long-term view of its business in China where it has built a strong foundation as part of the CapitaLand Group for over 30 years, said CLI&rsquo s group chief executive officer Lee Chee Koon.

 

Earlier this month, CLI announced it will launch its first real estate investment trust (Reit) in China with two major malls valued at 2.8 billion yuan (S$499 million).

 

On CapitaLand Commercial C-Reit&rsquo s proposed listing, Lee said: &ldquo CLI wants to continue to tap into China&rsquo s big domestic capital market to further grow its funds management business. Domestic investors are seeking opportunities to deploy their capital due to restrictions that limit the movement of yuan out from China.

 

&ldquo Whatever that we do, we want to make sure that we are better than the market,&rdquo Lee added. 

 

CapitaLand was listed in 2000 through a merger between Pidemco Land and DBS Land. 

 

Lee said: &ldquo It started off as a very Singapore-focused developer at that point in time. There was a big push to go beyond the region. We rode the China wave and built up a nice development business.&rdquo

 

He said that when he took over as president and group CEO of CapitaLand Group in 2018, the board and the management did a review of the business.

 

&ldquo CapitaLand Group&rsquo s business model had worked very well and built up a good foundation. However, when we looked at places like China, it was challenging for us to be competitive against the local developers because of (their) ability to secure land, build fast, manage the project at the lowest cost, and sell higher,&rdquo he said.

 

&ldquo During the CapitaLand Group days, the development process took a longer time and being a listed entity, CapitaLand Group had traded at a big discount to book value.&rdquo

 

This was because institutional investors generally do not like the lumpiness of the revenue and profits of development properties, Lee noted.

 

&ldquo So we made a decision&hellip to say that long-term... we should... focus to become an asset management business.&rdquo  

 

In 2021, CapitaLand Group was restructured into real asset manager CLI and CapitaLand Development, the group&rsquo s privatised development arm.

 

Asked if there are plans to grow its management of third-party assets, Lee said the group would do so in a way that makes strategic sense.

 

&ldquo In China, location is important. We do not... want to manage assets in cities where we do not already have a presence because scale is important and synergies are important. We want to make sure that it&rsquo s additive to the system so that we can help to strengthen the leasing network and improve the returns for our investors at the end of the day,&rdquo he said.

 

Data centres in India 

Beyond China, another key market for the group is India, especially in data centres and business parks. 

 

CLI is the most diversified real asset player in India with presence across all the top cities, Lee said. 

 

The group has built a diversified portfolio comprising more than 40 IT and business parks, industrial, logistics, lodging and data centre assets across eight cities in India &ndash Bengaluru, Chennai, Goa, Gurugram, Hyderabad, Kolkata, Mumbai and Pune. 

 

Obtaining land with a clean title can be difficult in India but the group&rsquo s 30 years of experience in India has enabled it to do so better than its peers, Lee said. 

 

Lee said: &ldquo If you&rsquo re a data centre operator without understanding of getting access to land, this becomes challenging... Being able to get land, being able to bring in power and being able to (add) on our data centre expertise &ndash that&rsquo s something we want to be able to do in India.&rdquo

 

CLI&rsquo s lodging unit, The Ascott, also announced this month it aims to double its portfolio in India to 12,000 units by 2028, up from about 5,500 units at the end of 2024. 

 

The self-storage sector is an asset class in which CLI sees strong potential, with rising urbanisation and smaller living spaces.

 

Lee explained: &ldquo Self-storage is a stable income-generating business as demand tends to be sticky. For example, customers typically store items such as their wine collections over a long period of time. Also, in countries where there are four seasons, customers will also typically store their winter wear and ski equipment after winter, and their summer wear after summer.&rdquo

 

He noted: &ldquo While it takes a bit longer to build up occupancy, depending on the location and how aggressive the marketing team is but once the cashflows are there, it&rsquo s very low maintenance. It&rsquo s a great asset class... not just in Asia. We hope to do this in a more global manner.&rdquo  

 

The group, which announced last December it will acquire private credit investment manager Wingate Group Holdings, is looking to build up a broader Asia-Pacific private credit business. 

 

Many of the banks in Australia and South Korea are reducing their exposure to real estate financing because of regulatory reasons, Lee said. 

 

The group will assess more opportunities for South Korea and Australia, and some interesting opportunities may come up in Hong Kong and potentially Singapore. 

 

When asked if there were plans for any new acquisitions in Singapore, Lee said if there are good opportunities allowing CLI to extend its coverage, it will continue to pursue them. 

 

&ldquo We aim to build a company with truly global reach and capabilities. As a home-grown company from Singapore, it&rsquo s a great joy to have built a strong international track record and reputation &ndash enabling us to raise capital from sovereign wealth funds, pension funds, family offices and corporates across the world to co-invest with us in opportunities based on the quality returns we have consistently delivered,&rdquo said Lee.

 

&ldquo A significant part of this success also stems from the trust that investors place in Singapore and a Singapore-incorporated company.&rdquo

It is confident it can take Asian capital into those mature markets

 

[SINGAPORE] CapitaLand Investment (CLI) seeks to grow its presence in the United States and Europe which are mature markets with deep pools of capital.

 

In an interview with The Business Times, group chief executive officer Lee Chee Koon said: &ldquo The private markets are&hellip a lot more mature than what we have in Asia-Pacific, and we believe we can bring Asian capital &ndash whether it&rsquo s through Asian family offices, insurance companies or other capital partners &ndash that will be interesting.&rdquo

 

While the group is looking at broadening its asset management capabilities, it will need to be very careful in evaluating deals and be more thorough in its due diligence given the present market volatility, Lee said. 

 

When asked how the tariffs rolled out by the United States in early April have had an impact on how CLI makes investment decisions, Lee said: &ldquo There are a lot of questions (on) everyone&rsquo s minds because the uncertainty and frequent changes happening around the world make it not easy for us to underwrite deals at this point in time.

 

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&ldquo It is the short-term uncertainty that makes it difficult. Longer term, if you look at the US as a market in terms of the size and the potential, it is definitely a market that we will not ignore.&rdquo

 

The group wants to focus on private credit and special situations in the real estate space, Lee said. &ldquo It could be a platform, or lifting a team of people who can help us. We want to invest in a platform that has a good track record (and) good ability to raise capital.&rdquo  

 

Three important considerations for an acquisition would be the strategic fit, cultural fit and the pricing, Lee said, adding: &ldquo We want to be able to pay a fair price for a platform that is geared up to grow.&rdquo  

 

CapitaLand Investment&rsquo s launch of new C-Reit comes as it takes long-term view of China business

Lodging and hospitality remains a key interest for the group. &ldquo Japan is a strong hospitality market with tremendous room to grow, and insufficient hotel and serviced apartments to cater to the high demand,&rdquo Lee said. 

 

While hotels are a cyclical business and demand generally falls in a recession, as a whole, there is an increase in demand for travel, he added. 

 

If you look at Asia as a whole, you still have groups of people getting wealthier, Lee said. For instance, India&rsquo s growing middle class has fuelled demand for travel to countries in the region such as Thailand and Malaysia. 

 

In 2013, lodging arm Ascott had about 30,000 units, but it now has about 168,000 units as at Dec 31, 2024, Lee said.

 

&ldquo We have gained recognition amongst international travellers and owners, and that&rsquo s why the signing pace has accelerated. Our lodging management business is a business that we want to continue to grow,&rdquo he added.

 

The group is open to growing its lodging business organically as well as through merger and acquisition opportunities, Lee said, adding: &ldquo There are investors who are very keen on the lodging sector. They like the fact that each asset is not huge, and the quality of the income stream is high.&rdquo  

 

The real estate industry has faced challenges in the last few years as interest rates rose rapidly in a short period of time and remained elevated, Lee said. 

 

He added: &ldquo During the good years when interest rates were down, the cost of capital was very low. You can make an acquisition as long as the return is higher than the cost of capital. and as the cap rate continues to compress &ndash that&rsquo s how you made money. Those days are over.

 

&ldquo Today, what can make a difference is whether you have strong boots on the ground, deep capabilities and can source deals off-market and deliver alpha returns.&rdquo

 

When asked whether the group has ambitions of becoming a large private equity firms such as KKR or Blackstone, Lee said CLI wants to be as successful as the big players. 

 

However, the group&rsquo s heritage and background is different from these companies, many of which built their businesses in the US. 

 

&ldquo While the market (in) Asia-Pacific is huge, it&rsquo s fragmented. We do need to recognise that as (we) build up the business.&rdquo

 

Lee was named Industry Figure of the Year &ndash Asia-Pacific at the Private Equity Real Estate Awards 2024 in March 2025.

 

Since the second half of last year, the gap in bid-ask prices for potential transactions has narrowed, Lee noted. 

 

He said: &ldquo We are confident in fund raising, and being able to source and execute good off-market deals given our strong teams on the ground which are able to capture interesting, mispriced opportunities that arise amidst market volatility.&rdquo

 

Lee added: &ldquo With our strong balance sheet and experienced teams on the ground, we will remain agile and disciplined in pursuing strategic growth. While many asset management platforms were previously trading at very high multiples in the US, market conditions have shifted in recent weeks.

 

&ldquo Market dislocations may present attractive opportunities for CLI to acquire a portfolio of undervalued assets, which can later become seed assets for our new private funds or be offered to our listed funds, expanding our funds under management. There could also be interesting opportunities in the unlisted space to acquire platforms that could strengthen our asset management capabilities and fuel CLI&rsquo s growth.&rdquo

 

He noted: &ldquo We will continue to monitor the evolving global landscape. We don&rsquo t need to rush, and will be prudent in deal-making.&rdquo