Temasek to inject USD1bn into China real estate market

SinoCast Daily Business Beat

Adjustments China makes in the domestic real estate market provide great opportunities for international capital, which is snapping projects there in the mode of funds.

Mapletree Investments, a unit of Singapore-based Temasek Holdings, said recently that with the completion of the investment of Mapletree India China Fund, it would establish an about USD 1 billion fund to aim at commercial complexes in first-tier Chinese cities. The fund, focusing on both commercial and residential projects, is expected to be triggered within six to 12 months.

“Mapletree has entered the Chinese market for a long period of time but till now, it has not gotten a proper opportunity to stretch out reach to commercial complex projects in Shanghai,” Loh Shyh, the company’s CEO for China, said in an interview. “It is time for it to take move now as real estate projects in the eastern Chinese municipality are mainly industrial and logistics ones.”

According to Mapletree, its core urban complex brand Vivo City will walk out of Singapore for the first time. Vivo City in Xi’an, capital of northwest China’s Shaanxi Province, is scheduled to start operation this December. In addition, the Mapletree India China Fund has two projects in Beijing and one in Foshan, Guangdong Province. “The investment totals about USD 617 million, accounting for around 60 percent of the part for China,” reiterated Loh. “The remainder is expected to be fulfilled soon as related negations have been started.”

Mapletree India China Fund, with a designed investment size of USD 1.16 billion, is launched to aim at development of office buildings, shopping malls, and residential buildings in China and India, two of the world’s largest emerging markets. And of the total, 60 percent to 80 percent will be injected into the Chinese market. “The design period of the fund is ‘5 + 5’ mode and when and how it will quit will mainly depend on the market situation,” added Loh. “There is possibility for Mapletree to establish Reits in Singapore but it is not the key. The key is the return on investment.”

Established in 2000, Mapletree focuses on real estate and capital management in Asia. So far, it has stretched out reach to 10 Asian cities including Singapore. And the capital under its management and custody has exceeded SGD 13 billion. (USD 1 = CNY 6.77 and USD 1 = SGD 1.35)


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