Temasek Moves to Split CapitaLand into Two Units

Posted on 03/23/2021


CapitaLand Limited is restructuring. Singapore’s biggest real estate firm is splitting its main businesses. CapitaLand plans to create and list an investment management entity which will house operations including real estate investment trusts and lodging. The firm will privatize its property development arm since it contains “longer-gestation projects” that require more intensive capital.

CapitaLand’s generated a record loss of S$1.57 billion in 2020 as the coronavirus pandemic triggered writedowns of some investment properties and residential projects.

The new entity is called CapitaLand Investment Management. CapitaLand Investment Management will have assets under management of about S$ 115 billion. The real estate development business will be fully held by CLA Real Estate Holdings Pte. Ltd., an indirect wholly owned unit of Singapore’s Temasek Holdings. Temasek approved of the deal, which is the majority shareholder of CapitaLand holding 2,717,991,172 shares, or 52.24% of the company.

The move will position the company as an “asset-light and capital-efficient business,” Chief Executive Officer Lee Chee Koon said in a statement.

Lee will helm the new entity, and CapitaLand will be delisted upon the proposal’s approval. The delisting and listing may take place by the fourth quarter of 2021.

Advisors

DBS Bank Ltd. is the strategic advisor for the transaction, while J.P. Morgan (S.E.A.) Limited is providing investment banking services.

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