Singapore-based real estate and financial service giant CapitaLand has established its first affordable housing private equity fund.
According to a statement issued by the firm, CapitaLand China Value Housing Fund (CCVHF) will invest primarily in value or affordable housing developments in China. The fund has successfully closed on $215 million of commitments and has a fund life of five years.
Two housing projects currently under development, The Rivervale in Guangzhou and The Floravale in Shanghai, will be injected into the fund as seed investments. The projects will yield more than 3,000 homes. CapitaLand’s residential unit CapitaValue Homes has a 58.6 percent interest in the fund amounting to $126 million. The remaining stakes are held by corporate and institutional investors.
Chen Lian Pang, chief executive officer of CapitaValue Homes, said in a statement: “The value housing segment in China continues to see strong underlying demand driven by rapid urbanisation, growing middle class and escalating home prices. China is currently 51 percent urbanised and seven million new households are expected to form every year. Value housing will meet the needs and affordability of many young and first time homebuyers.”
CapitaLand China Value Housing Fund is CapitaLand’s twelfth private equity real estate fund in China. Currently, CapitaLand has total assets under management of about S$36.1 billion (€22.9 billion, $29.6 billion) from its six REITs and 15 private equity funds.