• Singapore:
  • GIC Private Limited (GIC):  One of the world' s largest sovereign wealth funds, established in 1981 to manage Singapore' s foreign reserves.
  • Temasek Holdings:  Founded in 1974, it is a major investment company with a diverse global portfolio.
• Malaysia:
  • Khazanah Nasional Berhad:  The strategic investment fund of the Government of Malaysia, managing assets in key industries.
• Indonesia:
  • Indonesia Investment Authority (INA):  The country' s sovereign wealth fund focused on attracting investment for infrastructure and sustainable projects.
  • Danantara Indonesia:  A newer, second sovereign fund launched to further drive capital investment.
• Vietnam:
  • State Capital Investment Corporation (SCIC):  Manages state capital in key enterprises.
• Brunei:
  • Brunei Investment Agency (BIA):  A government-owned investment agency.
• Philippines:
  • Maharlika Investment Fund:  The Philippines' first sovereign wealth fund.
• Timor-Leste:
  • Timor-Leste Petroleum Fund (PT):  Manages the country' s oil and gas revenue. 
    Sovereign Wealth Fund Institute | SWFI  +7

A Reit is a permanent platform that can grow

[SINGAPORE]   Hongkong Land Holdings   : H78 +0.14% is pressing ahead with growth in fund management. 

 

The 136-year-old property group said recently that it has made significant advancements towards launching its first private real estate fund &ndash the Singapore Central Private Real Estate Fund (SCPREF).

 

SCPREF, which is expected to be the largest Singapore private real estate fund with over S$8 billion of assets under management at inception, will focus on prime commercial assets in the city-state.

 

Hongkong Land plans to transfer its 33.3 per cent interests in One Raffles Quay (ORQ) and Marina Bay Financial Centre (MBFC) Towers 1 and 2, as well as its 100 per cent interest in One Raffles Link (ORL) into SCPREF. 

 

Combined, these Central Business District (CBD) properties have a total attributable property value of S$3.9 billion as at end-June and contribute around 3.2 million square feet of prime office space on a 100 per cent basis.

 

Might Hongkong Land be wrong to choose a private fund instead of a Singapore-listed real estate investment trust (Reit) to hold prime Singapore commercial property? Arguably so, in my opinion.

 

Certainly, the Singapore Exchange and the Republic&rsquo s public equities market lose out from not having a multi-billion dollar new Reit listing. 

 

Indeed, yield-focused institutional and retail investors in public equities would likely very much welcome being able to invest in a trust owning only Singapore assets and predominantly Grade A office space. This is especially as the supply of CBD Grade A office space is tight, and the Republic is an attractive destination for businesses from diverse sectors to set up operations.

 

Of course, Hongkong Land&rsquo s board of directors need not be too concerned with helping the Singapore listed equities market grow. Nonetheless, some of the group&rsquo s minority investors might welcome having the opportunity to own units in a Singapore-listed Reit that is seeded by Hongkong Land&rsquo s prime commercial assets in the city-state.

 

Permanent platform for growth

Crucially, while a private fund may have a lifespan of say seven years, a Reit is a permanent platform. And in the Singapore context, a Reit with size, high-quality assets, a strong sponsor and an astute external manager can grow substantially.

 

Today, the Republic&rsquo s largest Reit,   CapitaLand Integrated Commercial Trust   : C38U +0.43% (CICT), has a portfolio of properties worth around S$27 billion. 

 

This trust made its trading debut on the local bourse as CapitaLand Mall Trust in July 2002 and was renamed CICT in November 2020 following the merger with CapitaLand Commercial Trust. The value of the property portfolio in the initial public offering in 2002 was a much smaller S$895 million.

 

Drivers of CICT&rsquo s growth include the merger, asset acquisitions, asset enhancement initiatives, asset redevelopments and organic growth. 

 

With its size, track record and trading liquidity among others, CICT is well liked by investors and trades at a premium to its end-June net asset value per unit of S$2.13. 

 

Importantly too, Singapore Reits have a good track record of raising debt and equity to support growth. On the equities front, many examples exist of Reits raising sizeable sums from private placements and preferential offerings.  

 

Yield challenges

Perhaps, listing a trust owning mainly Singapore Grade A office space is challenging on the yield front given Grade A office buildings typically transact at lower net property income (NPI) yields than other non-residential properties such as malls, business parks, warehouses, industrial properties, dormitories and hospitality assets.

 

The annual NPI yield of a Grade A office building with around 70 years of remaining land lease might be about 3.5 per cent based on market valuation. A trust focused on prime Singapore commercial assets could look to boost the overall property portfolio&rsquo s NPI yield to close to 4 per cent per annum by including CBD retail spaces or Grade A office buildings with shorter remaining land leases of say under 50 years.

 

Assume that Hongkong Land assembles at the inception of a potential Reit a Singapore commercial property portfolio with annual NPI yield of 3.8 per cent and such a trust is funded 60 per cent by equity and 40 per cent by debt, which costs 2.2 per cent per annum. 

 

The said Reit&rsquo s initial annual distribution per unit (DPU) yield could work out to around 4.3 per cent. This is equal to a spread of about 240 basis points over the five-year Singapore government bond yield of around 1.9 per cent per annum as at Dec 23.  

 

Possibly, an initial annual DPU yield of 4.3 per cent is sufficient for investors to support a trust with a strong sponsor that owns only Singapore prime commercial assets &ndash the bulk of which is Grade A CBD office space.

 

Where needed, a sponsor of a Singapore prime commercial Reit may even be justified to inject properties into the trust at a slight discount to independent valuation to boost DPU yield. After all, a manager of the said Reit may subsequently execute well in growing the trust&rsquo s returns to unitholders, thus resulting in investors in turn trading the trust at above its book value.

 

Sure, a public listing can involve a long and arduous journey. And numerous obligations come with being a public-listed entity.

 

Nonetheless, a listing of a Reit with a sizeable portfolio of premium assets by a strong sponsor can potentially pay off richly.

 

Ultimately, it may be a loss for the Republic&rsquo s bourse, as well as Hongkong Land&rsquo s shareholders that the property group is not launching a Singapore-listed Reit owning prime commercial assets including interests in ORQ, MBFC Towers 1 and 2 and ORL.

New fund will be Singapore&rsquo s biggest private real estate fund move follows divestments of other major assets

[SINGAPORE] Following the sale of its stake in Marina Bay Financial Centre (MBFC) Tower 3 to Keppel Reit, Hongkong Land on Friday (Dec 12) announced that it is injecting its interests in One Raffles Quay, MBFC Towers 1 and 2 into a new real estate fund that will be set up. 

 

The Singapore Central Private Real Estate Fund (SCPREF) is expected to hold more than S$8 billion in assets under management (AUM) at its inception.

 

It will be Singapore&rsquo s biggest private real estate fund and focus exclusively on managing prime commercial property assets in the Republic.

 

&ldquo The establishment of SCPREF is in line with the company&rsquo s strategy to grow its AUM to US$100 billion by 2035, with meaningful participation from third-party capital investors,&rdquo it said.

 

In a LinkedIn post on Friday, Hongkong Land&rsquo s chief executive Michael Smith said: &ldquo By placing Hongkong Land&rsquo s Singapore commercial portfolio alongside other assets acquired at inception, the fund will drive future growth in earnings and assets under management, while introducing a new revenue stream for Hongkong Land. 

 

&ldquo We will continue to manage and operate all the assets as both the fund manager and the single largest investor.&rdquo

 

Hongkong Land&rsquo s joint venture partners had the right of first refusal to purchase its stakes in the projects, along with its one-third stake in MBFC Tower 3, with the rights having expired on Thursday.

 

Keppel Real Estate Investment Trust (Reit) announced on Thursday that it was purchasing Hongkong Land&rsquo s Tower 3 stake for S$1.5 billion. The pre-emptive offers for One Raffles Quay and MBFC Towers 1 and 2 lapsed on the same day. 

 

Hongkong Land thus plans to transfer its interests in these remaining assets, along with its 100 per cent interest in One Raffles Link, to the new fund, it said. 

 

Combined, the assets designated for the fund held an attributable property value of S$3.9 billion as at Jun 30, representing around 3.2 million square feet of office space.

 

Net proceeds from the sale of MBFC Tower 3 will increase Hongkong Land&rsquo s total capital recycling achieved since 2024 from US$2.1 billion to US$2.8 billion. This figure represents around 70 per cent of the group&rsquo s US$4 billion capital-recycling target set for 2027.

 

The injection of assets into SCPREF follows Hongkong Land&rsquo s divestment of other major assets. In September, Malaysia&rsquo s Sunway said it was buying Hongkong Land&rsquo s development arm MCL Land for S$738 cash. 

 

In April, Hongkong Land sold office floors and retail spaces at One Exchange Square to the Hong Kong Stock Exchange for HK$6.3 billion (S$1 billion).

 

Jardines-controlled Mandarin Oriental in October announced the US$925 million sale of 13 floors at One Causeway Bay, to Chinese e-commerce giant Alibaba Group.

 

Hongkong Land said SCPREF is expected to launch with an AUM more than double the value of the seed portfolio provided by the company. It indicated that an announcement regarding the fund&rsquo s establishment is expected in Q1 2026.

 

Equity commitments from third-party capital investors are currently in the final stage of documentation.

 

The launch of the S$8 billion fund marks one of the first major milestones in the &ldquo fund management&rdquo pillar of Hongkong Land&rsquo s new strategy, which was unveiled in October 2024. 

 

At the time, the group announced it would exit the build-to-sell residential development business and pivot towards fund management, with a focus on ultra-premium integrated commercial properties in Asia&rsquo s gateway cities.

 

Then, Smith said in an interview with The Business Times: &ldquo The ideal situation is that we become a much more investment property-oriented, high-quality income company. We want to have third-party capital. We want to be a fund manager.&rdquo  

 

MBFC was originally developed by a consortium comprising Hongkong Land, Keppel Land and Cheung Kong.

 

Following the development&rsquo s completion, Keppel Reit acquired its initial one-third interest in the property from its sponsor, Keppel Land. The remaining one-third stake, currently held by anchor tenant DBS, was acquired from Cheung Kong&rsquo s share of the building.

The group is selling its share to Keppel Reit, which will have a two-thirds interest in the property upon completion

 

[SINGAPORE] Shares of   Hongkong Land   : H78 +5.48% rose on Thursday (Dec 11) following news of the S$1.45 billion sale of its stake in Marina Bay Financial Centre (MBFC) Tower 3 to Keppel Reit.  

 

The counter ended Thursday 5.5 per cent or US$0.36 higher, at US$6.93, with 7.5 million shares changing hands. 

 

On Thursday morning, Keppel Reit announced in a bourse filing that it had agreed to acquire an additional one-third interest in the MBFC asset from Sageland, a subsidiary of Hongkong Land. 

 

Upon completion of the deal, expected on Dec 31, Keppel Reit&rsquo s interest in the property will increase to two-thirds.

 

To fund the acquisition, the real estate investment trust launched an underwritten non-renounceable preferential offering to raise gross proceeds of around S$886.3 million. 

 

About S$875.6 million, or 98.8 per cent of the gross proceeds, will be used to partially finance the acquisition.

 

MBFC was originally jointly developed by a consortium comprising Hongkong Land, Keppel Land and Cheung Kong.

 

In response to queries from The Business Times on the rationale behind the investment, Hongkong Land said it would make an announcement soon.

It is expected to launch with an AUM more than double the value of the seed portfolio provided by Hongkong Land

 

[SINGAPORE] Hongkong Land on Friday (Dec 12) announced that it has made &ldquo significant advancements&rdquo towards the launch of its inaugural private real estate fund. This follows Thursday&rsquo s announcement of Keppel Reit&rsquo s planned acquisition of the group&rsquo s stake in Marina Bay Financial Centre (MBFC) Tower 3.

 

The new entity, called the Singapore Central Private Real Estate Fund (SCPREF), is expected to hold more than S$8 billion in assets under management (AUM) at its inception.

 

The fund will focus exclusively on managing prime commercial property assets in Singapore.

 

Keppel Real Estate Investment Trust (Reit) agreed to acquire Hongkong Land&rsquo s one-third interest in MBFC Tower 3 for around S$1.5 billion, the Reit manager announced on Thursday.

 

This price is 2 per cent above Hongkong Land&rsquo s independent valuation of the asset as at Jun 30, the company noted. 

 

Under its contractual obligations, Hongkong Land offered its joint venture partners pre-emptive rights to purchase its stakes in One Raffles Quay, MBFC Towers 1, 2 and 3 prior to the fund&rsquo s formation. The deadline for acceptance was Thursday.

 

While Keppel Reit exercised its option for Tower 3, the pre-emptive offers for One Raffles Quay and MBFC Towers 1 and 2 have lapsed. 

 

Hongkong Land thus plans to transfer its interests in these remaining assets, along with its 100 per cent interest in One Raffles Link, to the new fund, it said. 

 

Combined, the assets designated for the fund held an attributable property value of S$3.9 billion as at Jun 30, representing around 3.2 million square feet of office space.

 

Net proceeds from the sale of MBFC Tower 3 will increase Hongkong Land&rsquo s total capital recycling achieved since 2024 from US$2.1 billion to US$2.8 billion. This figure represents around 70 per cent of the group&rsquo s US$4 billion capital-recycling target set for 2027.

 

Hongkong Land stated that SCPREF is expected to launch with an AUM more than double the value of the seed portfolio provided by the company. 

 

Equity commitments from third-party capital investors are currently in the final stage of documentation.

 

&ldquo The establishment of SCPREF is in line with the company&rsquo s strategy to grow its AUM to US$100 billion by 2035, with meaningful participation from third-party capital investors,&rdquo it said. 

 

The group indicated that an announcement regarding the fund&rsquo s establishment is expected in Q1 2026.

Company says outlook for its full-year financial results remains unchanged

 

[SINGAPORE]   Hongkong Land&rsquo s   : H78 -0.47% underlying profit for the third quarter of its 2025 financial year is 13 per cent lower than the same period the previous year.

 

This is primarily due to lower contributions from its Hong Kong office portfolio and pre-opening costs of its prime properties in China, said the property company in an interim management statement filed on the bourse on Thursday (Nov 20). 

 

Hongkong Land added that its outlook for the full-year financial results remains unchanged, with performance expected to be lower than the previous year. However, it said that the company&rsquo s financial position remained strong. 

 

The firm had generated net cash inflows in Q3. When combined with proceeds from the sale of MCL Land, net debt was down to US$4.4 billion as at Oct 31, 2025, while gearing ratio &ndash which measures a company&rsquo s debt to equity &ndash went down to 15 per cent. 

 

Hongkong Land had announced in September that it would sell its Singapore and Malaysian property arm MCL Land to Malaysia&rsquo s Sunway Group in a S$738.7 million cash deal. 

 

In its bourse statement, Hongkong Land said that total net proceeds from the divestment, including cash distributions before completion, amounted to S$839 million. Including the proceeds from this transaction, the company has secured 50 per cent of its target of recycling at least US$4 billion of capital by the end of 2027. 

 

The US$200 million share buyback programme announced in April this year has also been fully invested, reducing the issued share capital of the company by 1.6 per cent. 

 

An additional US$150 million, financed by proceeds from the MCL Land transaction and other recycled capital, was allocated to the share buyback programme in September, with about US$40 million invested to date.

 

The company had announced last month its plans for the next 10 years to exit the build-to-sell residential development business as it pivots towards fund management and focuses on ultra-premium integrated commercial properties in Asia&rsquo s gateway cities. 

 

Malaysia&rsquo s Sunway to buy Hongkong Land&rsquo s development arm MCL Land for S$738.7 million cash

It intends to recycle up to US$10 billion in capital by 2035, and grow assets under management from US$40 billion now to up to US$100 billion by then.

 

While the company had already exited the Singapore and Malaysia residential markets, it has continued with ongoing projects in China and a select number of South-east Asian countries. 

 

Hongkong Land noted that buyer sentiment for the residential sector in China deteriorated in the quarter, as the impact of new stimulus policies were limited. It will carry out a thorough review of the carrying value of its build-to-sell inventory in China at the end of the year. 

 

The company has focused on driving sales by adapting its sales strategies and selectively reducing selling prices to cater to local market conditions. Further price reductions may be considered in the remainder of the year, as it continues to progress towards its capital-recycling targets. The firm had secured attributable contracted sales of US$161 million in Q3.