Ascendas eyes investors, banks for funds

                                                                                         

Singapore office and industrial parks landlord Ascendas plans to double its assets under management to more than S$10 billion by 2010, funding its expansion in Asia with a mix of bank financing and private equity.

Ascendas’ top executive said the firm would focus on key growth markets such as China, India and Vietnam — where demand for office and industrial space is rising as companies around the world shift their business processing and manufacturing to cheaper centres.

“Our sources of funding will come from banks as well as from co-investors,” Ascendas chief executive officer Chong Siak Ching told Reuters in Manila, where the firm has announced it will invest US$150 million in an office complex.

The company is in talks with potential investors to raise a combined S$1 billion ($649 million) for two private-equity funds it is setting up for its expansion in India and China.

The initial size of the India investment fund, which will focus on developing land into industrial parks, will be S$500 million, while the China fund will start with a range between S$300-500 million.

“The investors are largely private equity,” Chong said, adding that the company typically funds about half of each investment from bank loans.

Ascendas has assets valued at S$640 million in China, representing about 4.5 million square feet in leasable space, while its India properties, valued at S$640 million, yield about 3.6 million square feet.

Ascendas, a unit of Singapore state-owned industrial landlord JTC Corp, already manages an office real estate investment fund in Korea and an India fund that invests in information technology (IT) parks.

The Korean fund, which has a target size of US$500 million, has Samsung Life Insurance, Korea Life Insurance and LIG Insurance as co-investors, while General Electric (GE) Commercial Finance Real Estate, a unit of conglomerate GE, is one of the investors in the India fund.

The company would also consider raising a single investment fund aimed at markets such as the Philippines, Malaysia, Thailand and Indonesia, Chong said.

Ascendas, which controls Singapore’s second-biggest property trust, Ascendas Real Estate Investment Trust, is in talks with banks for a Singapore listing of the first India fund, which was set up in 2005 with a target size of S$800 million.

“We won’t rule out (listing this year),” Chong said.

If the listing occurs this year, it could be the first real estate investment trust or REIT based purely on Indian properties.

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