Real asset manager intends to grow its presence and engage investors in the region, as the oil-producing nations reinvent themselves

 

[SINGAPORE] CapitaLand Investment (CLI) has set its sights on lucrative Gulf markets, eyeing fast-growing logistics and hospitality sectors as the region&rsquo s oil-producing nations move to remake themselves.

 

  CLI   : 9CI 0% opened an office in the Dubai International Financial Centre last July, as the real asset manager seeks to grow its presence and engage institutional investors and family offices in the region.  

 

Traditionally viewed as deep sources of capital, countries in the Gulf Cooperation Council (GCC) &ndash Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates &ndash are positioning themselves as investment destinations as well, CLI&rsquo s group chief operating officer Andrew Lim told The Business Times in an interview.

 

The region&rsquo s &ldquo very deep and liquid pools of capital&rdquo range from sovereign wealth funds to large, highly sophisticated family offices as well as newer and smaller ones. 

 

&ldquo Oil-producing countries in the GCC are aware that these resources are finite, and they need to leverage the wealth which they have built up to reimagine, reinvent and remake themselves.&rdquo

 

Andrew Lim, CapitaLand Investment group chief operating officer

 

Increasingly, the GCC is positioning itself as an investment destination for infrastructure, logistics, data centres and tourism, Lim noted. &ldquo They want to be seen as a centre for capital, tourism (and) human resources to congregate.&rdquo

 

This fundamental change has been taking place over the last three to five years, and CLI &ndash like many of its peers &ndash is &ldquo heeding that call,&rdquo he said. 

 

&ldquo We see opportunities to put together interesting products that invest into the GCC, alongside capital partners from the GCC and from outside the GCC as well.&rdquo  

 

The recent &ldquo very large, very ambitious&rdquo economic transformation initiatives that Gulf countries have embarked on include Dubai&rsquo s free-trade zones and Saudi Arabia&rsquo s Vision 2030. 

 

Lim said: &ldquo Oil-producing countries in the GCC are aware that these resources are finite, and they need to leverage the wealth which they have built up to reimagine, reinvent and remake themselves as destinations for infrastructure, tourism, supply chains, digitalisation. (They) are looking for partners to help them do that.&rdquo  

 

Demand for logistics 

He also noted that established supply chains in China and India have been compelled to reorder themselves amid geopolitical uncertainty.

 

&ldquo As the world&rsquo s supply chain reorders, a place such as the GCC, which is geographically halfway between Europe and Asia, starts to emerge as a very logical destination,&rdquo he said.

 

Last September, CLI launched the SC GCC Real Estate Industrial Development Fund, with SC Capital Partners as the co-sponsor. THi Holding Management Corporation is the development manager, asset manager and operator.  

 

The fund&rsquo s first project involves the development of 300,000 square metres of land in the up-and-coming emirate of Ras Al Khaimah (RAK) into an industrial park, which is expected to attract more than 50 tenants and create 1,800 jobs.

 

&ldquo SC Capital, who identified this piece of land, (has) a great relationship with RAK, and THi (has its) own set of customers who have already indicated: &lsquo If you build it, we will come,&rsquo &rdquo said Lim.

 

He noted that across most of the main GCC markets, logistics sector occupancies are near 100 per cent.

 

&ldquo There is intense competition for land (with) which to develop logistics and industrial facilities &ndash so much so that the authorities are having a hard time keeping up with the demand.&rdquo

 

However, even though the logistics sector is highly attractive, CLI is &ldquo careful about ensuring that our investment criteria are met&rdquo , he said.

 

&ldquo We can&rsquo t be overly ambitious and end up overpaying for land (or) accepting terms which are disadvantageous to our capital partners. 

 

&ldquo When you have a very strong market, just like anywhere else in the world, as an investment manager and a fiduciary to (our) third-party capital partners, (we) have to be very disciplined in how we manage the money that&rsquo s entrusted to us.&rdquo  

 

Opportunities in lodging 

CLI has also identified potential in the GCC&rsquo s lodging sector.

 

&ldquo The tourism industry in Saudi Arabia is just taking off now. It is underserved as a hospitality market. A lot of the tourism-related real estate has yet to be built,&rdquo Lim said.

 

For instance, while Saudi Arabia is known for its vast deserts, few are aware that there is a mountainous region in Aseer with a temperate climate, he added. &ldquo You go up into the mountains, it&rsquo s cool, the air is very clean. There (are) a lot of wellness opportunities there.&rdquo  

 

CLI&rsquo s lodging arm, The Ascott Limited, holds leading Indonesian hotel operator Tauzia &ndash it acquired a 70 per cent stake in 2018 and now fully owns it. 

 

&ldquo One thing about Middle Eastern capital is that they are very agnostic to political winds. They are sophisticated investors. They go where they think the opportunity is.&rdquo

 

Andrew Lim, CapitaLand Investment group chief operating officer

 

&ldquo Leveraging our strong brand recognition in Indonesia, we could take these brands into Saudi Arabia to offer lodging for Muslims who are making the Haj, providing comfort, safety and security during the pilgrimage,&rdquo Lim said. 

 

He pointed out that CLI has had a presence in the GCC for about two decades through Ascott, which manages more than 2,400 units across 14 operating and pipeline properties in five countries across the region. 

 

&ldquo We see the GCC very strategically as a destination for tourism and hospitality, and we want to do much more.&rdquo  

 

Connecting capital 

CLI is also looking to strengthen relationships with sovereign wealth funds, institutional investors and family offices, engage new investors and originate high-quality opportunities for them across the GCC and globally, he said. 

 

&ldquo It&rsquo s very important for us to be able to cultivate deep, lasting, mutually collaborative and trusting relationships with our capital partners.&rdquo  

 

Connections with Middle East investors will allow CLI to showcase its Asia-Pacific strategies, which fall under three major themes: demographics, digitalisation and disruption. 

 

&ldquo One thing about Middle Eastern capital is that they are very agnostic to political winds. They are sophisticated investors. They go where they think the opportunity is.&rdquo  

 

He also said that China is arguably a &ldquo great place to invest in right now&rdquo , if investors have long-term horizons as asset prices have come down. 

 

&ldquo You can buy good-quality (assets) for a much lower entry point than any time in the last five years. So if I take away all the political uncertainty (and) geopolitics, and look at it strictly from a real estate basis, the market that is most attractive right now is probably China.&rdquo  

 

Investors from the GCC are also &ldquo hungry for anything that&rsquo s in Singapore&rdquo . He said: &ldquo Singapore is a very interesting destination for global capital because I think we consistently demonstrate (the) key attributes for capital partners &ndash stable real estate environment, rule of law, strong currency. 

 

&ldquo All these things matter to global capital, and it matters even more in a situation where the global situation is unstable (and) uncertain.&rdquo  

 

The challenge with Singapore is that it is not a &ldquo deep, liquid market&rdquo .   &ldquo There&rsquo s only so much square footage and almost of it is securitised,&rdquo he said. 

 

&ldquo There&rsquo s very little new stuff you can buy, so you have to go in and look for assets that... have been transacted already, but for one reason or another are coming to the market again.

 

&ldquo That&rsquo s (why) I think the demand for commercial, institutional-grade real estate is not going to go away anytime soon.&rdquo

71,000 sq m facility set for completion in 2028 CLI also takes minority stake in smart logistics firm Ally Logistic Property

 

[SINGAPORE]   CapitaLand Investment Limited   : 9CI +2.16% (CLI) on Thursday (Jan 8) announced plans for its regional fund to develop a S$260 million automated facility in Singapore. 

 

It also announced a minority investment in smart logistics infrastructure company, Ally Logistic Property (ALP), which will lease the facility.

 

CLI&rsquo s CapitaLand South-east Asia Logistics Fund (CSLF) has acquired a 5.1-hectare (ha) site at 19 Gul Lane in the Jurong Industrial Estate to develop the project &ndash Omega 1 Singapore.

 

The five-storey facility is set to be completed in 2028 and will have a gross floor area of 71,000 square metres. It will also be equipped with robotics, as well as an automated storage and retrieval system capable of handling about 60,000 pallet positions.

 

Patricia Goh, CLI&rsquo s chief executive officer of South-east Asia and global head of logistics and self-storage, private funds, said that the move is a strategic response to demand for &ldquo modern, automated logistics solutions across the region&rdquo . 

 

This demand, she said, has been driven by growth in digitally enabled consumption, an ageing population, rising labour costs and supply chain rationalisation.

 

Concurrent with the development, CLI has acquired a minority stake in ALP, a smart logistics infrastructure firm based in Asia.

 

Upon completion of Omega 1 Singapore, the facility will be fully leased to ALP under a master lease agreement. The deal includes built-in rent escalation, which CLI said will provide CSLF investors with stable and growing income.

 

Over the past two years, CLI has deployed about S$500 million into logistics developments across South-east Asia. 

 

Following the Gul Lane transaction, the geographical composition of CSLF&rsquo s portfolio will shift, with Singapore assets now accounting for 55 per cent of its total assets under management. The remainder of the fund&rsquo s portfolio is located in Thailand and Vietnam. 

 

The fund&rsquo s other major projects include Thailand&rsquo s Omega 1 Bang Na, a 20-ha smart logistics campus in Bangkok, with Phase 1 expected to complete in mid-2026. 

 

The fund also has a ready-built factory at Song Khoai Industrial Park in Quang Ninh, Vietnam, which broke ground in September 2025 and is targeting completion by the first half of 2026.

 

Mitsui OSK Lines (MOL) also announced on Thursday that it is investing in the development of Omega 1 Singapore. 

 

The investment has been made through its existing interest in CSLF, which MOL invested in Omega 1 Bang Na and the development of a business park in Chennai, India, in 2024.

 

The shipping company said its investment aligns with the Blue Action 2035 management plan, under which it is reforming its business portfolio. 

 

As part of this strategy, the group has been expanding its logistics and industrial business, particularly through the growth of its logistics infrastructure segment, with a shift to a global business structure.