CapitaLand Fund Buys Shanghai Office Complex From Tishman Speyer for $1.1B

CapitaLand today announced the largest expansion yet of its renminbi fund management business with the acquisition of a Tishman Speyer office complex in Shanghai at a value of RMB 7.6 billion ($1.1 billion).

CapitaLand Investment’s (CLI) China Business Park Core RMB Fund II has acquired phase one of The Springs Center in Yangpu district from the New York-based developer, with the Singapore firm acting as co-general partner on the vehicle together with Yuanjian Gongchuang Capital Management Co. Ltd, a fund management unit of China’s state-owned Dajia Insurance, according to a statement on its official WeChat account.

The renminbi fund deal is the latest in a series by CapitaLand Investment, which set up its first such vehicle in June of last year, with the company having declared in November that it had raised RMB 3.6 billion for China Business Park Core RMB Fund II with the goal of making a future acquisition.

For Tishman Speyer, the sale of the 10-building campus provides the developer and fund manager with an exit from one of its highest profile investments in China. “We set out here more than a decade ago to create a vibrant, mixed-use community designed to bring together world class technology companies,” Tishman Speyer chief executive Rob Speyer said in a statement, calling CapitaLand’s purchase, “a testament to the tremendous success of our vision.”

Springs for Sale

With The Springs having attracted tenants including Nike, auto component manufacturer Continental AG and consumer goods firm Henkel, Tishman Speyer had sold a four-building piece of the complex under development in Jiangwan New Town to Bytedance in 2021, with that project valued at $1.25 billion.

In this latest transaction, the CapitaLand fund is acquiring 200,000 square metres (2.15 million square feet) of LEED Gold-certified space completed between 2014 to 2019. At the stated compensation, the vehicle has taken possession of the LEED Gold-certified assets at the equivalent of RMB 38,000 per square metre, with the office component now 99 percent occupied, according to the Tishman Speyer statement.

The ten-building business park is part of  The Spring’s 900,230 square metre campus, which includes residential, hotel, dining and entertainment components in addition to the office accommodation, with a second phase currently under development.

“We are very proud of the management and operation of The Springs, which has quickly become a hub of innovation and creativity in Yangpu district,” said Tishman Speyer China CEO Wilson Chen.

He added that the company looks forward to the upcoming opening of “The Eye of Wisdom” a pair of towers measuring 280 and 250 metres in height under development in phase two of The Springs, which, at the time of the Bytedance deal were on track for completion in 2025.

Domestic Deals

For CapitaLand Investment, the Springs acquisition is its third renminbi fund deal since it established its first domestic vehicle in China in mid-2022, with the company also set to serve as asset manager for the project.

“The successful establishment of three RMB funds within half a year proves that CapitaLand’s nearly 30 years of local experience in China and its asset and fund management capabilities have been fully recognized by the market,” Puah Tze Shyang, chief executive for China at CapitaLand Investment said in a statement. He added that, “At the same time, we have also welcomed a number of high quality domestic capital partners, which diversifies our capital pool and provides growth momentum for our investment management business.”

With its first domestic mainland vehicle, CapitaLand Investments China Special Situation RMB Fund (CSSRF) I, which raised RMB 700 million in partnership with a local asset manager, CapitaLand Investment acquired an unspecified office property in Shanghai, with that transaction announced in June 2022.

The company followed up in November of last year by teaming up with unnamed local investors to raise RMB 380 million for China Business Park Core RMB Fund I (CBPCF I), which acquired the Ascendas i-Link property in Pudong’s Zhangjang High Tech Park from CapitaLand’s portfolio.

Capitaland Investment now manages a total of RMB 4.7 billion via its domestic Chinese funds, with that cash committed to three separate office and business park assets in Shanghai. Members of the company’s senior management described the renminbi strategies to Mingtiandi as a “major focus” of CapitaLand Investment’s private equity real estate business.