Singapore’s CapitaLand forms US$300m JV to invest in US multifamily assets

Singapore's CapitaLand forms US$300m JV to invest in US multifamily assets
The 341-unit multifamily property project in Austin Image:CapitaLand

CapitaLand, headquartered and listed in Singapore, announced that it has formed a programmatic joint venture to acquire and develop multifamily assets totalling US$300 million (S$416.1 million) in gross asset value in the US. 

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 US, 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 green 341-unit suburban multifamily property, expected to be completed in 2023.  

CapitaLand said the upcoming 341-unit multifamily property in Austin is well-situated in a bustling locale close to commercial, residential and leisure activities.  The development is a five-minute drive from The Domain, a node for live, work and play, and commonly referred to as “Austin’s second downtown”.  The Domain comprises over 1.8 million square feet of retail amenities and over 3.4 million square feet of office space as well as 3,700 apartments and 900 hotel rooms.

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“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,” said  Jason Leow, President, Singapore & International, CapitaLand Group.

”Our multifamily properties have remained resilient and achieved a current committed occupancy rate of about 95%.  Across the USA, multifamily 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,” said Dang Phan, Managing Director for USA, CapitaLand International.

“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.