Mapletree Investments, the Singapore-based developer and fund manager of state-owned investment company Temasek Holdings, is set to break the record for the largest China-focused private equity real estate fund ever raised.
PERE has learned the company held a first close for Mapletree China Opportunity Fund II on in excess of $1.1 billion last month – meeting already its original overall target for the fund. And, with more investors in detailed talks over committing to the vehicle, it is on course to become a record-breaking fund when it holds a final close later this summer.
Mapletree itself and its parent company are both thought to have contributed sizeable investments – Mapletree as the General Partner and Temasek as a Limited Partner according to a source in Asia.
The news comes at a time when China is experiencing a ‘credit crunch’ of its own with fluctuating liquidity albeit in a long-term growth market where the long-standing issue remains that there are few institutional-grade real estate assets. All three factors are stimulating interest among European, US, Middle Eastern and Asian investors and a number of China focused private equity real estate funds have attracted meaningful capital in recent months.
Muhyiddin Razack, head of private funds and investor relations at the company said Mapletree would not comment, but the opportunity fund is already at least equal to the largest China funds and separate accounts raised to date. The biggest recorded are the Raffles City China Fund, managed by CapitaLand, and Winnington Capital’s Trophy Property Development Fund, which both raised just over $1 billion in 2008. The next largest are CapitaLand’s CapitaMalls China Development Fund ($900 million in 2006), CapitaMalls China Development Fund III ($1 billion in 2012), and the Macquarie Chinese Real Estate Fund II ($1 billion in 2011). In terms of separate accounts, the largest recorded vehicle is Goodman China Logistics Holding which collected $1 billion in 2009. That is an 80,20 joint venture between the Canadian Pension Plan Investment Board and Goodman which was recently extended by $500 million bringing the total equity allocation to $1.5 billion.
Mapletree launched its fund just eight months ago with Hodes Weill & Associates being appointed as placement agent. It is an integrated real estate company employing around 1,600 people and has offices in seven countries. The company currently manages around S$21.8 billion (€13.2 billion; $17.2 billion) of office, logistics, industrial, residential, retail and mixed-use properties across Asia. Its portfolio includes VivoCity, Singapore’s largest retail and lifestyle destination mall and Mapletree Business City, a business hub in Singapore’s Alexandra area.
In China, it has large-scale development projects underway such as the Mapletree Minhang Development Project, Future City and Nanhai Business City.
Mapletree declined to comment, but investors for its latest China fund have been told that the company has assets to seed the vehicle.
The fund is targeting opportunistic returns and is looking to invest in class A offices, business parks and retail and mixed use projects in Tier One and Tier Two Chinese cities.
The Mapletree China Fund II is a follow up to Mapletree India China Fund which has an April 2008 vintage and is now fully invested. It has $1.158 billion of assets in China and India.
As well as private funds, Mapletree also manages public property companies. In March this year it listed its fourth REIT, Mapletree Greater China Commercial Trust on the Singapore Stock Exchange. It was 29.5x subscribed and raised more than s$1.6 billion making it the largest REIT IPO in Singapore ever.