CapitaLand Investment Limited - Annual Report 2021

FY 2021 Performance Review BUSINESS PERFORMANCE PRIVATE FUNDS By continuing to focus on expanding our private investment solutions, we increased the FUM of our private funds business to S$28.5 billion in FY 2021, a 10.5% increase over FY 2020. Our global real estate platform combined with our extensive local operating presence provides a competitive advantage in deal sourcing, origination and execution. In FY 2021, CLI raised S$1.4 billion of equity from institutional investors and capital partners with seven new private fund launches. While these are not expected to be significant contributors to our total return in the short term, they represent our commitment to expand our product offerings across asset types and strategies. As we continue to build on this track record, we expect new capital raises to become increasingly meaningful over time. BY INVESTOR TYPE BY INVESTOR DOMICILE Asia Pacific 56% North America 23% Europe 18% Middle East 3% Pension Fund 38% Sovereign Wealth Fund 36% Corporation 11% Insurance 7% Bank 2% Others 2 6% FUM 1 : S$28.5B FUM 1 : S$28.5B 1 As at 31 December 2021. 2 Others include HNWIs, Trust Companies, Investment Managers, Hedge Funds, Cooperatives, Securities Companies, Endowments, Government. FY 2021 Fund Launches Data Centre Opportunistic Core In May 2021, we launched Korea Data Centre Fund 2 (KDCF2), with 100% third-party capital to invest in an off-market data centre development opportunity in South Korea for KRW141 billion (S$166 million). This marks our second dedicated data centre fund in South Korea, reflecting our investment expertise and market position for data centres. Credit Opportunistic In June 2021, we closed a HKD1.15 billion (S$199 million) real estate debt fund to provide mezzanine financing backed by a residential development project in Hong Kong. The private debt opportunity was sourced, underwritten and secured by the Group’s specialised Private Debt team. Logistics Opportunistic Core In July 2021, we closed our second India-focused logistics fund, CapitaLand India Logistics Fund II (CILF2), with total committed equity of INR22.5 billion (S$307million) with an existing institutional investor. This follows the successful deployment of our first India logistics fund. The strategy benefits from the continued demand for quality warehouse and distribution facilities, on the back of e-commerce growth in India, a trend that was further accelerated by the pandemic. Open-end Fund Core Core+ In August 2021, we launched our flagship Open-end Real Estate Funds (COREF), a regional open-end fund to provide global institutional investors with long- term strategic exposure to a diversified portfolio of institutional-grade, income-producing assets across developed markets in Asia Pacific. COREF is currently in the build-up phase and has made its first investments in two commercial assets in Japan. Artist’s impression of KDCF2’s data centre development in South Korea. Commercial Core Core+ In September 2021, we successfully launched our first Japan Core Office private fund. The private fund is fully deployed through the acquisition of CLI’s interests in two commercial assets in Japan with FUM of about JPY 44.1 billion (S$537.7 million). CLI has a 4.98% stake in the fund while the remaining stake is held by new local institutional capital partners in Japan such as Keikyu Corporation, Taisei Corporation, Fuyo General Lease and Odakyu Real Estate. Cold-storage Logistics Core and Value-Add In September 2021, we incepted a dedicated Korean cold storage logistics fund for KRW85.7 billion (S$101 million) with majority third-party commitments to acquire two operating cold storage facilities near Seoul. CLI expanded its relationship with these investors and established a second dedicated Korean cold storage value-add logistics fund in November 2021 with KRW44.5 billion (S$53 million) in equity commitments. Both funds are fully deployed. FY 2021 Private Fund Exits And Realisation In FY 2021, CLI successfully exited and realised the following funds: In June 2021, we divested partial stakes in Raffles City China Investment Ventures and Senning Property Fund which held six Raffles City developments1 to Ping An Insurance. The divestment at an agreed property value of RMB46.7 billion (~S$9.6 billion) was a 6.7% premium to the assets’ FY 2020 valuation. While CLI reduced our ownership in these assets from as high as 55% to between 12.6% to 30% in each development, we continue to generate FRE as their asset manager. In November 2021, we successfully executed the recapitalisation of a value-add fund holding a freehold office property in Singapore’s CBD after receiving an unsolicited offer from a third-party investor. The basis for the recapitalisation reflects a realised project level internal rate of return (IRR) of over 60%. In the same month, our private debt team negotiated an early repayment for the HKD1.15 billion (S$199 million) mezzanine financing. Our investors achieved a net IRR of over 25% because of the early redemption by borrower. LOOKING AHEAD The Group is committed to achieving our goal of S$100 billion in FUM by 2024. Along with sustaining organic growth for our listed REITs and business trusts, we look to increase the number of private real estate funds we manage, through enhancing our private equity fund-raising and research capabilities, expanding product offerings, and extending our network of capital partners globally. With approximately S$10 billion of assets on CLI’s balance sheet, as well as deal-sourcing and operating expertise, particularly in Asia-Pacific, the Group is well- positioned to support the growth of our fund vehicles. 1 Includes Raffles City Shanghai, Raffles City Changning, Raffles City Ningbo, Raffles City Hangzhou, Raffles City Chengdu and Raffles City Beijing. Annual Report 2021 39 CapitaLand Investment Limited 38