SINGAPORE: CapitaLand has formed a programmatic joint venture to scale its multifamily asset portfolio in the United States of America (USA), a news release said.
Through the joint venture, CapitaLand will have a strategic arrangement with its joint venture partner to acquire and develop multifamily assets totalling US$300 million (S$416.1 million) in gross asset value.
The joint venture partner is an Austin-headquartered real estate investment, development and property management firm.
The joint venture will invest in multifamily assets in the Southeast and Southwest markets of the USA, with an initial focus on Austin, Texas. CapitaLand and its partner have acquired a freehold land parcel in the high growth, technology-driven city of Austin to develop the joint venture’s first multifamily project.
CapitaLand holds an 80% stake in the project while its partner holds the remaining 20%. The 4.71-acre land parcel will be developed into a modern, mid-rise and green341-unit suburban multifamily property, expected to be completed in 2023.
CapitaLand’s partner has developed over25,000 multifamily units across high growth and resilient markets in the USA since its inception 25 years ago.
Mr Jason Leow, President, Singapore & International, CapitaLand Group, said: “Development is one of CapitaLand’s key strategic growth pillars, along with lodging and fund management. CapitaLand’s acquisition of this prime site to develop our first multifamily property in Austin and having a potential pipeline of projects in the Southeast and Southwest markets of the USA will accelerate CapitaLand’s growth in the resilient multifamily sector.
It adds to our current portfolio of 16 freehold suburban multifamily properties which we acquired in 2018, strengthening CapitaLand’s presence and track record in the market. We will continue to seek attractive investment opportunities to build upon our diversified and well-balanced portfolio to deliver long-term value for our stakeholders.”
Mr Dang Phan, Managing Director for USA, CapitaLand International said: “Since the acquisition of our suburban multifamily portfolio in 2018, we have value-added to the assets through progressive refurbishment to enhance returns. Our multifamily properties have remained resilient and achieved a current committed occupancy rate of about 95%.
Across the USA, multi family rents have recovered faster than other asset types during the past recessions. Prior to COVID-19, allocation of investment capital towards the multifamily sector has exceeded that of other property types and the pandemic has accelerated this preference.
Growing our investment in the resilient, liquid and stable-yielding multifamily portfolio will provide income stability.”
“Despite COVID-19, Austin continues to be an attractive technology, business, government and investment hub with a steady outlook, an ideal base for CapitaLand to scale our multifamily portfolio in the USA.
Austin’s business-friendly policies, high quality of life and skilled workforce have attracted major technology and Internet companies such as Amazon, Apple, Google, IBM, Oracle and Tesla to set up substantial operations in the city. The city’s focus on technology has also fuelled its population and job growth, consistently outpacing the national average.
The demand for quality housing has risen correspondingly, with rents increasing 50% over the past decade,” added Mr Phan.
The property is well-poised to meet the demands of technology and other professionals working nearby, seeking a convenient, well-designed and safe residential option in close proximity to the commercial developments.
With this new investment, CapitaLand will have S$4.7billion of assets under management in the USA. CapitaLand first entered the USA in 2015. Its current 16 multifamily properties with over 3,700 apartment units are located in well-connected suburban communities of the metropolitan areas of Seattle, Portland, Greater Los Angeles and Denver.
