CapitaLand together with the Maybank Group, through its investment banking arm Aseambankers Malaysia Berhad have launched the first Malaysia Commercial Development Fund.
The closed end private equity investment fund has a target fund size of $US250 million.
MCDF will be CapitaLand’s first and one of the largest funds in Malaysia with expected gross development value of $US1 billion. MCDF is expected to close by first quarter 2007.
MCDF will be an opportunistic real estate fund investing in real estate development properties in Kuala Lumpur and the Klang Valley.
MCDF’s seed investment is One Mont’ Kiara, a mixed development comprising two office towers, a retail podium and car parks, on a site area of approximately 151,000 sq ft at an estimated project cost of RM360 million. Works on the mixed development is expected to commence in the first quarter of 2007 and completed by third quarter of 2010.
CapitaLand’s president Liew Mun Leong said with the setting up of MCDF, the first commercial development fund in Malaysia, the CapitaLand Group will extend its international expertise in the real estate value chain and expand its integrated real estate and capital management business to Malaysia.
The group has successfully executed this strategy in other countries such as China.
“…we will leverage on the skills and resources of several experienced real estate developers to tap into the tremendous growth potential in the Malaysian real estate market.
“We are also bringing this opportunity to international and domestic investors who share our confidence in Malaysia. With this set up and the recent launch of Quill Capita Trust, the real estate investment trust which invests in completed yield-focused product, QCT will grow its assets significantly as it has access to a pipeline of completed properties developed by MCDF,” he added.
The Malaysian real estate market is undergoing a stage of rapid growth underpinned by healthy economic performance frequently boosted by the provisions in the five-year Malaysian Plans.
Based on the 9th Malaysian Plan, Federal Territory, which comprises Kuala Lumpur, Putrajaya and Labuan, received the highest development allocations of RM31 billion (S$13.5 billion).
Kuala Lumpur being the focal point of the services sector in Malaysia is expected to benefit from the development plans intended to enhance the services sector. The development of Phase 2 of the Multimedia Super Corridor, Kuala Lumpur as Malaysia’s financial hub and strengthening Malaysia’s position as a global Islamic financial hub all serve to highlight the many opportunities that could arise in the real estate sector.
Separately, CapitaLand’s wholly-owned subsidiary, CapitaLand Commercial and Integrated Development Limited is going to sign certain agreements to acquire two development projects which will form as potential acquisition pipeline for injection into MCDF.
By Adam Parsons
