This article is from the Australian Property Journal archive
SINGAPORE’S CapitaLand Investment Limited (CLI) has made a new $1 billion commitment to grow its funds under management in Australia, targeting real estate private equity and credit, logistics, business parks, office, and lodging, and has poached two senior figures from Barrenjoey Capital Partners to help spearhead the mission.
Cross-border real estate investment in the Asia-Pacific has jumped by nearly 16% over the past year, as interest rate cuts see optimism creeping back into the market.
“A stable, open and developed market, Australia is one of CLI’s focus markets where we see huge potential for both organic and inorganic growth,” CLI’s group chief operating officer Andrew Lim said.
“We currently have $9 billion of assets under management in Australia and are committed to invest up to an additional $1 billion to grow our funds under management in Australia.”
Foreign investment has so far made a mixed recovery out of the pandemic. Overseas investors deployed nearly $3 billion in the September quarter, down slightly from 2023, but year-to-date levels remain steady at $7.1 billion. Whilst this matches 2023 levels, last year’s total was the lowest since 2012. However, overseas capital accounted for 35% of September quarter volumes – the highest quarterly share this year.
Japanese investors were the most active source of offshore capital in Australia throughout 2023, putting $2 billion towards assets down under, and Japanese groups including Hankyu Hanshin, Mitsui Fudosan, Nippon Steel Kowa Real Estate, Mitsubishi Estate Asia and Sumitomo Forestry have made major purchases in recent months.
Singaporean-listed companies UOL Group and Singapore Land Group recently confirmed their acquisition of Brookfield’s half-stake in Sydney office tower 388 George Street at $460 million.
CLI’s Australian portfolio currently comprises logistics, business parks, office and lodging assets across nine cities. CLI currently manages 34 logistics properties and business parks and four A-grade office buildings. and has over 13,500 lodging units across about 150 properties under its wholly owned lodging business unit, The Ascott Limited.
Rejigging its Australian portfolio, CapitaLand earlier this year – despite the continued downward repricing of commercial property – through its CapitaLand Ascendas REIT finalised the $73 million sale of three Queensland industrial and logistics assets at a 6.2% premium to book value. That followed its combined $109 million divestment of two Sydney Hotels, the 194-room Novotel Sydney Parramatta and the 196-room Courtyard by Marriott North Ryde, out of its CapitaLand Ascott Trust.
Two years ago, CapitaLand backed a rebound in Melbourne’s CBD with the $320 million acquisition of the 120 Spencer Street tower opposite Southern Cross Station, on the back of a $1.5 billion buying spree in Australia.
Most recently, CapitaLand has also been looking for new tenant at its 28,000 sqm former Cadbury factory in one of Melbourne’s key industrial spots, Dandenong South. Also owned through the CapitaLand Ascendas REIT, the former chocolate and Easter egg storage facility had an asking rent of $205 per sqm net or $5.78 million per year. The previous tenant, Mondelez, who owns Cadbury, Pascall, and Oreo, had relocated to a new 43,000sqm fully automated facility in ESR Australia & New Zealand’s Palmers Logistics Estate. The exit clearly hasn’t dented CapitaLand’s view of its prospects down under.
Major appointments
To help facilitate the boost in investment, Barrenjoey pair Angelo Scasserra has been made chief executive officer, CLI Australia and Rahul Bharara chief investment officer, CLI Australia, with both expected to join the company in the first half of 2025.
They will be responsible for driving the growth of CLI Australia’s business, including real estate private equity and credit funds, working with CLI Australia’s managing director Paul Toussaint and team, to manage CLI’s $9 billion-plus of assets under management across logistics, business parks, lodging and commercial assets down under.
Scasserra brings over 25 years of experience in real estate funds management, corporate finance and law. Prior to joining CLI, he was led the real estate private capital division at Barrenjoey. Before that, he spent almost 20 years in Credit Suisse in Australia and Singapore, with his last held position as the head of Asia Pacific real estate and co-head of investment banking and capital markets in Credit Suisse Australia.
Bharara brings 21 years of experience in the real estate sector, which includes investment management, corporate finance and development. Prior to joining CLI, he was partner, real estate private capital at Barrenjoey. In other roles, he was also managing director, head of real estate coverage at Credit Suisse Australia and chief investment officer at prominent developer Tim Gurner’s Gurner Group.
Andrew Lim, group chief operating officer, CLI, said: “Angelo and Rahul have worked together for over a decade and have extensive experience in the private equity and real estate sector, making them excellent additions to strengthen our leadership team in Australia”.
