CapitaLand, Maybank set up M'sian real estate fund (Updated)

from biz time online

Singapore’s CapitaLand group has teamed up with Malayan Banking Bhd group to set up a closed-end private equity investment fund, Malaysia Commercial Development Fund (MCDF), with a target fund size of US$250 million (about RM887 million).

MCDF — CapitaLand’s first and one of the largest funds in Malaysia with an expected gross development value of US$1 billion — will allow investors to access a portfolio of prime real estate development projects in Malaysia.

The Singapore-based fund, which closes by the first quarter of next year, will acquire, develop, redevelop and realise profits in commercial and integrated projects in the Klang Valley.

The Maybank Group and CapitaLand Commercial and Integrated Development Ltd (CCID) will sponsor MCDF with MCDF Management Pte Ltd as the fund manager. Both CICD and MCDF Management are subsidiaries of CapitaLand.

Aseambankers Malaysia Bhd, the investment banking arm of Maybank, will act as the principal adviser to MCDF Management, providing advisory services on Malaysian capital market and funding issues.

In a statement on Dec 13, CapitaLand said MCDF’s seed investment is One Mont’Kiara, a mixed development comprising two office towers, a retail podium and car parks, on a 151,000 sq ft site at an estimated project cost of RM360 million.

CapitaLand said work on the project would start in the first quarter of next year for completion by the third quarter of 2010. It said One Mont’Kiara was an established upper middle-class residential area with a developed expatriate community.

It said separately, CCID woud also sign certain agreements to acquire two development projects, which may later be injected into MCDF.

In a separate statement, Aseambankers said MCDF provided an opportunity for international and regional investors to participate in the current growth phase of the Malaysian property sector.

Parties led by Aseambankers chief executive officer (CEO) Surachet Chaipatamamont and CCID chief executive officer Martin Tan are holding several roadshows in key Middle East cities, namely Bahrain and Dubai.

“With the setting up of MCDF, the first commercial development fund in Malaysia, the CapitaLand group will extend its international expertise in the real estate value chain and expand its integrated real estate and capital management business to Malaysia.

“It has successfully executed this strategy in other countries such as China. We will leverage on the skills and resources of several experienced real estate developers to tap into the tremendous growth potential in Malaysia’s real estate market,” said CapitaLand group president and CEO Liew Mun Leong.

CapitaLand said Malaysia was an attractive market opportunity as its real estate market was undergoing rapid growth, underpinned by healthy economic performance frequently boosted by the provisions in the five-year Malaysian Plans.

In Malaysia, CapitaLand has a 30% stake in the 50-storey Menara Citibank office tower, and a 40% stake in a joint venture with Quill Group to develop a premier office building in KL Sentral.

CapitaLand also has a 40% stake in Quill Capita Management Sdn Bhd, the manager of Quill Capita Trust, a real estate investment trust which recently launched its initial public offering.