CapitaLand Investment raises over US$650 million for second lodging fund, exceeds target

CapitaLand Investment (CLI) has achieved the final close for its second lodging private fund, CapitaLand Ascott Residence Asia Fund II (Clara II).

In an announcement on Wednesday (Nov 5), the global real asset manager announced it secured more than US$650 million in total equity commitments and co-investments for the fund and its associated vehicles.

This amount exceeded the fund’s equity target of US$600 million.

Andrew Lim, group chief operating officer of CLI, said the successful close “reflects investors’ confidence in CLI’s deep investment expertise and active asset management capabilities”.

The fund is expected to add around US$1.6 billion to CLI’s total funds under management.

Investors in the fund include new and repeat capital partners from Asia, Europe and North America, comprising institutional investors, pension funds and financial institutions.

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“CLI has committed a 20 per cent sponsor stake to ensure strong alignment,” the company noted.

About half of the fund’s committed equity has already been deployed across three assets: serviced residence Citadines Shinjuku Tower Tokyo and lyf Shibuya Tokyo in Japan, as well as lyf Bugis Singapore. The latter two are co-living properties.

“We are seeing increasing investor allocations into the sector attracted by their long-term growth potential,” Lim said.

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He added that this potential is “underpinned by trends such as rising mobility, the surge in ‘bleisure’ travel and demand for flexible living arrangements”.

Mak Hoe Kit, managing director of lodging private equity funds at CLI, noted that strong support from capital partners demonstrates trust in the company’s capabilities and lodging fund strategy. “Our competitive edge in seeing through the full life cycle of our assets is key to Clara II’s value-add strategy,” he said.

He pointed to a proven track record from CLI’s first lodging private fund.

“Returns on divestment for our previous assets such as lyf Ginza Tokyo and lyf Funan Singapore were above the fund’s target, generating alpha for our capital partners,” Mak said.