CapitaLand to buy Ascendas business units in $8 billion deal
CapitaLand will buy the holding firms of Ascendas-Singbridge real estate trusts in a cash-and-stock deal
Singapore-based CapitaLand Ltd Monday said it has agreed to acquire Ascendas-Singbridge Group’s stake in two of Ascendas-Singbridge’s subsidiaries, in a cash-and-stock deal worth S$11 billion ($8 billion). The transaction, subject to approval by CapitaLand’s independent shareholders, will create the largest diversified real estate group in Asia.
Singapore state investor Temasek fully owns Ascendas, and holds a 40.8% in CapitaLand. After the transaction closes, Temasek’s ownership of CapitaLand will increase to about 51%.
The real estate trusts that are part of the deal include Ascendas Real Estate Investment Trust, Ascendas India Trust and Ascendas Hospitality Trust.
Ascendas-Singbridge, which has assets under management (AUM) worth S$2.6 billion in India’s business sector, had set up Ascendas India Trust to own income-producing business assets in the country. It had also launched a $400 million programme to invest in prime logistics and industrial real estate in June, 2018.
With its early-mover advantage, India will become an important market for the combined group as it further develops these new economy sectors, CapitaLand and Ascendas-Singbridge said in a joint statement on Monday.
The transaction will create a group with a combined AUM above S$116 billion.
Its asset classes will include logistics and business parks, industrial, lodging, commercial, retail and residential assets spanning 32 countries.
While Ascendas is entirely backed by Temasek, the latter’s ownership of CapitaLand will increase from 40.8% to about 51.0% once the transaction closes.
“Geographically, the deal strengthens CapitaLand’s presence in its core markets of Singapore and China, and adds meaningful scale in India, the US and Europe. The deal immediately adds a portfolio of operating assets that contribute to today’s income, while adding a sizeable pipeline of development projects for the future,” said Lee Chee Koon, president and group chief executive officer, CapitaLand.
The expanded entity will leapfrog CapitaLand’s 2020 assets under management
target of S$100 billion, putting it among the top 10 real estate investment managers globally and making it the 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.
“CapitaLand is very enthusiastic about this transformational transaction and the prospect of growing the combined platforms into a leading global real estate group. Our complementary strengths position us strongly for growth amidst the changing real estate environment in Singapore and internationally,” said Ng Kee Choe, chairman of the CapitaLand board.
“With enlarged scale, expanded capabilities and resources, and a global footprint, we look forward to delivering high quality growth sustainably,” he added.
Miguel Ko, executive director and Group CEO, Ascendas-Singbridge, said the company’s early-mover advantage in high-growth markets and attractive new economy sectors will also bolster its ambition to become the developer of cutting-edge urban solutions in Asia.
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