Singapore’s Mapletree Investments plans to set up a China-focused fund that will have US$500 million to US$1 billion ($624 million to $1.2 billion) to invest in Chinese commercial property once it deploys most of the money in its existing funds, a senior executive said on Wednesday.
The fund, which will be backed by internal funds and money raised from outside investors, will likely be launched in 2012 or 2013, Group Chief Investment Officer Chua Tiow Chye told reporters at a press conference.
“The new China fund will be purely commercial-related so investors are quite clear what they are co-investing with us,” said Chua.
“Looking at our pipeline, for us to deploy US$500 million worth of equity over a period of 2-3 years should not be an issue,” he added.
Mapletree Investments, a property firm owned by state investor Temasek (TEM.UL), manages property funds including several that are listed on the Singapore Exchange.
For the financial year ended March, the firm made a net profit of $747 million, 90% higher than $394 million it made in 2009/2010. Mapletree Investments owns or manages $15.4 billion worth of assets as at March 31, it said in its annual report.
Earlier this year, it raised $898 million through the initial public offering of Mapletree Commercial (MACT.SI), whose key asset is Vivocity, Singapore’s largest shopping mall.
On the upcoming China fund, Chua said Mapletree Investments targets annual returns of about 18-22%, similar to what it hopes to achieve for its existing US$1.2 billion China and India fund.
The China-focused fund will likely invest in commercial assets in the office, retail and some mixed-residential sectors in the country’s first and second-tier cities.
He added that the Temasek-linked firm expects to do better than most players in the increasingly crowded China market, given its experience in managing malls and offices across the region.
“Because of all the anti-speculative measures which the government has put in place, there’s quite a fair bit of interest by even local developers to look at commercial properties,” he added.
Mapletree Investments, which also expects to launch a US$300-$500 million Vietnam fund in 2013, does not currently have plans to list itself, Group Chief Executive Hiew Yoon Khong said.
Source : TheEdge – 26 May 2011