OCBC Investment Research 2015-07-14: CapitaLand - Sets up JV with Qatar Investment Authority. Maintain BUY.

CapitaLand: Sets up JV with Qatar Investment Authority 

  • CapitaLand (CAPL) announced that it has established with Qatar Investment Authority (QIA) a 50-50 JV to set up a US$600m (S$809m) serviced residence fund with an initial focus on Asia Pacific and Europe. 
  • The JV term is 10 years with an investment period of three years, and the capital will be drawn down progressively from CAPL and QIA. 
  • The fund will invest in development, redevelopment and turnkey opportunities, as well as acquire suitable projects for asset enhancement, repositioning or conversion into serviced residences and rental housing properties. 
  • This is Ascott’s largest private equity fund to date, and is part of CapitaLand’s efforts to further grow its fund management business with blue chip capital partners. 
  • We understand that CAPL targets to launch six new funds with total AUM of up to S$10b by 2020. 
  • We are overall positive on this development, which will accelerate Ascott's portfolio growth and operational scale, increase the group's fee based income and enhance ROE. 
  • Maintain BUY with an unchanged fair value estimate of S$4.07. 

(Eli Lee)

Source: http://www.ocbcresearch.com/