The weekly round-up continues with interesting snippets from various companies during the week.
CapitaLand Limited (SGX: C31)
There’s never a dull moment with CapitaLand.
Just a week after we wrote on the property giant’s move to divest its Japanese mall assets, the group made another two announcements this week.
The first is the establishment of a second logistics private fund in India worth S$400 million.
Named “CapitaLand India Logistics Fund II”, the fund will invest in the development of logistics assets in key warehousing and manufacturing hubs across six key cities — Ahmedabad, Bangalore, Chennai, Mumbai, National Capital Region, and Pune.
With the fund’s launch, CapitaLand’s total assets under management (AUM) will grow to S$79.2 billion.
This second logistics fund will increase the group’s fee-related earnings and funds under management (FUM), with a target for FUM to hit at least S$100 billion by 2024.
The second announcement involves CapitaLand’s lodging business unit, The Ascott Limited.
Ascott launched a global online booking platform called discoverasr.com to unify its 14 lodging brands on a single, easy-to-use platform.
New features allow members to filter their search for any one of Ascott’s brands, quickly identify and book the best deals, and redeem points that can be used to offset the cost of their stay.
These two moves are a further demonstration of CapitaLand’s evolution to increase its fee-related income and harness the power of digitalisation to garner more customers.
Ascendas India Trust (SGX: CY6U)
We now shift from CapitaLand to one of the REITs that it is managing, namely Ascendas India Trust, or AIT.
The Indian property trust owns a portfolio of seven IT business parks and one logistics park in India, with AUM totalling S$2.1 billion as of 31 December 2020.
AIT will invest INR 12 billion (around S$216.6 million) to develop and operate its first data centre campus.
The trust will acquire a 6.6-acre greenfield site in Navi, Mumbai, and develop it into a fully-fitted data centre (DC) campus with two buildings.
Phase one of the project is scheduled to be completed by the second quarter of 2024 and will have a built-up area of around 325,000 square feet.
There is a good reason why AIT is throwing its hat into the ring.
The DC market is projected to grow at an annual rate of 31% by 2023, with the Indian government’s digitalisation push creating stronger demand for data storage.
Post-acquisition and development, AIT’s portfolio size will increase by around 1.2% to 25.2 million square feet.
City Developments Limited (SGX: C09)
City Developments Limited, or CDL, another property giant in Singapore, is facing continued financial pressure from one of its joint venture (JV) investments.
Back in March, the group announced a massive S$1.9 billion loss due to an impairment of S$1.78 billion on its JV investment in China called Sincere Property Group (“Sincere”).
Sincere’s troubles are far from over, though.
A bankruptcy claim was filed by Beijing Yi He Mercury Investment Co Ltd, a creditor, against Sincere.
However, CDL stated that it has ring-fenced its financial exposure to Sincere and will not support the continued financial obligations of its JV investment.
After its significant impairment was made on Sincere, the group’s exposure amounts to only S$126 million as of 31 December 2020.
What this means is that CDL could potentially impair another S$126 million in its books for the current fiscal year, but that this amount will be the only remaining exposure for the property group.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.