CLI’s Strategic Focus: Expanding REITs and Private Funds in Australia and Beyond

CLI’s Strategic Focus: Expanding REITs and Private Funds in Australia and Beyond

November 26, 2024 Catherine Williams - Chief Editor Business

Overview of CLI‘s Expansion and Growth Strategy

CLI is focusing on growing its assets under management (FUM), which currently totals $113 billion. The company plans to expand through its REITs platform, private funds, lodging management, and commercial management. CLI’s growth will come from organic expansion, new listings, and mergers and acquisitions.

Current FUM Distribution

Out of the total $113 billion in FUM:

  • $69 billion is in listed REITs and funds.
  • $44 billion is in private funds.

Expansion in Australia

CLI has announced its intention to strengthen its business in Australia by:

  • Appointing Angelo Scasserra as CEO of CLI Australia and Rahul Bharara as Chief Investment Officer, effective in the first half of 2025.
  • Investing up to A$1 billion (approximately $876.7 million) to increase FUM in Australia.
  • Closing its Australian Credit Programme, CLI’s first credit fund, with A$265 million in funding from Asian investors.

Acquisition Plans

CLI is reportedly looking to acquire Melbourne-based investment manager Wingate Group, enhancing its position in the Australian market.

Historical Context with Australand

Previously, in 2014, CapitaLand sold Australand Property Group. This divestment allowed CapitaLand to focus on its core businesses, particularly in Singapore and China. CLI’s chairman commented that the decision to sell was made without foresight of the current challenges in China.

Growth Targets

CLI aims to double its FUM to $200 billion. Key strategies include:

  • Increase growth in private funds, especially logistics and other strong asset classes.
  • Focus on expansions in India, Japan, Korea, Australia, and Southeast Asia, especially as China’s growth slows.

Shift Focus from China

CLI intends to reduce its exposure to China, which currently represents 27% of FUM. The company aims for this figure to drop to 10-20% by 2028. As CLI expands its footprint in Asia ex-China, it anticipates significant growth in the FUM from Australia, Korea, Japan, and India.

Future REIT Developments

CLI plans to potentially list new REITs in China, India, and Australia over the next five years. The company emphasizes that favorable conditions could drive these developments.

Market Reactions and Company Priorities

JP Morgan expressed cautious optimism, noting that CLI’s transition could take time. Analysts pointed out the importance of consistent profit growth and shareholder engagement. CLI remains committed to increasing top-line growth and earnings to enhance return on equity (ROE).

Conclusion

CLI is actively pursuing growth through strategic investments and market expansions while managing challenges in its existing investments. The company’s focus on clarity, operational efficiency, and geographical diversification positions it for future success.