HT-MintAsia Leadership Summit: China, India, Vietnam and Singapore to be CapitaLand’s top Asian markets
CapitaLand Financial president Jonathan Yap said that while real estate is not anti-recessionary, it will always have its place as a lucrative investment class in the market.
China, India, Vietnam and Singapore will be CapitaLand’s key Asian markets amidst the Singaporean real estate firm’s hunt for yield in the current low-growth environment.
Speaking at the HT-Mint Asia Leadership Summit 2019 in Singapore on Friday, CapitaLand Financial president Jonathan Yap said that while real estate is not anti-recessionary, it will always have its place as a lucrative investment class in the market.
“Research has shown that property has proven to be able to withstand recessionary pressures very well because you’ve got tenants signing up for leases over a prolonged period of time. And if you curate your customers well enough, it does give you that stability in returns,” Yap said.
The SGX-listed real estate giant has had an eventful year. In January, CapitaLand forked out a hefty S$6 billion ($4.4 billion) to acquire the holding companies of Ascendas-Singbridge Group to become Asia’s largest real estate investment manager.
One week later, the SGX-listed firm announced plans to consolidate two of its real estate investment trusts (REITs) – Ascott Residence Trust and Ascendas Hospitality Trust - to form a combined $5.6 billion worth in combined assets.
“The main motivation is to create a real estate champion globally… We now have an end-to-end offering across retail, residential, commercial and offices, from property development to fund management. This allows us to experiment and scale a variety of use cases for a more seamless real estate offering,” explained Yap.
After the merger, CapitaLand has $129 billion of assets under management (AUM). It runs a fund management platform managing about S$70 billion of funds, including seven Singapore-listed REITS, and 23 private equity real estate funds.
Yap added that CapitaLand will focus on China, India, Vietnam and Singapore moving forward – markets it believes presents various points of market strength in the real estate market. He also sees opportunity for the firm to channel the flow of capital from Asia to other developed markets globally.
“We also want to facilitate the flow of capital from Asian markets to developed markets elsewhere like Australia, Europe, the US. We want to use our presence in Asia and access to capital to those places. It creates scale as well as focus around the businesses that we’ve created through this merger,” Yap said.
He added that CapitaLand intends to do more in India over the next five years. Despite India’s prevalent market weakness, he said its young population, rising middle income class and strong competitive workforce are strong ingredients for the long-term.
CapitaLand is present in 200 cities across 30 countries, with assets including shopping malls, lodging and offices.