CapitaLand Investment looks to expand in US, Europe while navigating market uncertainty
[SINGAPORE] CapitaLand Investment (CLI) seeks to grow its presence in the United States and Europe which are mature markets with deep pools of capital.
In an interview with The Business Times, group chief executive officer Lee Chee Koon said: “The private markets are… a lot more mature than what we have in Asia-Pacific, and we believe we can bring Asian capital – whether it’s through Asian family offices, insurance companies or other capital partners – that will be interesting.”
While the group is looking at broadening its asset management capabilities, it will need to be very careful in evaluating deals and be more thorough in its due diligence given the present market volatility, Lee said.
When asked how the tariffs rolled out by the United States in early April have had an impact on how CLI makes investment decisions, Lee said: “There are a lot of questions (on) everyone’s minds because the uncertainty and frequent changes happening around the world make it not easy for us to underwrite deals at this point in time.
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“It is the short-term uncertainty that makes it difficult. Longer term, if you look at the US as a market in terms of the size and the potential, it is definitely a market that we will not ignore.”
The group wants to focus on private credit and special situations in the real estate space, Lee said. “It could be a platform, or lifting a team of people who can help us. We want to invest in a platform that has a good track record (and) good ability to raise capital.”
Three important considerations for an acquisition would be the strategic fit, cultural fit and the pricing, Lee said, adding: “We want to be able to pay a fair price for a platform that is geared up to grow.”
Lodging and hospitality remains a key interest for the group. “Japan is a strong hospitality market with tremendous room to grow, and insufficient hotel and serviced apartments to cater to the high demand,” Lee said.
While hotels are a cyclical business and demand generally falls in a recession, as a whole, there is an increase in demand for travel, he added.
If you look at Asia as a whole, you still have groups of people getting wealthier, Lee said. For instance, India’s growing middle class has fuelled demand for travel to countries in the region such as Thailand and Malaysia.
In 2013, lodging arm Ascott had about 30,000 units, but it now has about 168,000 units as at Dec 31, 2024, Lee said.
“We have gained recognition amongst international travellers and owners, and that’s why the signing pace has accelerated. Our lodging management business is a business that we want to continue to grow,” he added.
The group is open to growing its lodging business organically as well as through merger and acquisition opportunities, Lee said, adding: “There are investors who are very keen on the lodging sector. They like the fact that each asset is not huge, and the quality of the income stream is high.”
The real estate industry has faced challenges in the last few years as interest rates rose rapidly in a short period of time and remained elevated, Lee said.
He added: “During the good years when interest rates were down, the cost of capital was very low. You can make an acquisition as long as the return is higher than the cost of capital. and as the cap rate continues to compress – that’s how you made money. Those days are over.
“Today, what can make a difference is whether you have strong boots on the ground, deep capabilities and can source deals off-market and deliver alpha returns.”
When asked whether the group has ambitions of becoming a large private equity firms such as KKR or Blackstone, Lee said CLI wants to be as successful as the big players.
However, the group’s heritage and background is different from these companies, many of which built their businesses in the US.
“While the market (in) Asia-Pacific is huge, it’s fragmented. We do need to recognise that as (we) build up the business.”
Lee was named Industry Figure of the Year – Asia-Pacific at the Private Equity Real Estate Awards 2024 in March 2025.
Since the second half of last year, the gap in bid-ask prices for potential transactions has narrowed, Lee noted.
He said: “We are confident in fund raising, and being able to source and execute good off-market deals given our strong teams on the ground which are able to capture interesting, mispriced opportunities that arise amidst market volatility.”
Lee added: “With our strong balance sheet and experienced teams on the ground, we will remain agile and disciplined in pursuing strategic growth. While many asset management platforms were previously trading at very high multiples in the US, market conditions have shifted in recent weeks.
“Market dislocations may present attractive opportunities for CLI to acquire a portfolio of undervalued assets, which can later become seed assets for our new private funds or be offered to our listed funds, expanding our funds under management. There could also be interesting opportunities in the unlisted space to acquire platforms that could strengthen our asset management capabilities and fuel CLI’s growth.”
He noted: “We will continue to monitor the evolving global landscape. We don’t need to rush, and will be prudent in deal-making.”
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