Singapore – Mapletree today announced that it has entered into a joint venture with one of Malaysia’s leading merchant banks, Commerce International Merchant Bankers Berhad (CIMB)’s wholly-owned subsidiary, CIMB Real Estate Sdn Bhd (“CIMB RE”), to form a real estate fund management company called CIMB Mapletree Management Berhad (CMM).
Mapletree will hold a 40% stake in the Malaysia-based joint venture company through its wholly owned subsidiary, Mapletree Capital Management. The other 60% will be held by CIMB RE. The joint venture company will develop and manage real estate funds in Malaysia.
The first fund to be established and managed by CMM will be the CM-1. CM-1 will be a closed-end fund with a target committed capital of MYR 500 million (SGD 222 million). It will be seeded with an initial investment of MYR 100 million each from Mapletree and CIMB, with the balance MYR 300 million to be raised from institutional investors. CM-1 will have a charter fund life of 10 years.
CM-1’s investment approach and coverage will be opportunistic and multi-sectored, with the ability to acquire the different property types and also to invest in high-yield real estate debt instruments. CM-1 will also have the ability to invest up to 20% of its total committed capital in properties outside Malaysia.
With a growing demand from Middle Eastern investors, who are shifting their investment focus from the US and Europe to Asia, CMM will establish a separate Islamic real estate fund that will cater to these Middle Eastern investors.
As the Fund Manager, CMM will receive a base management fee tied to the size of the Fund and an incentive management fee tied to the performance of the Fund.
Yang Bahagia Dato’ Nazir Razak, Group Chief Executive of CIMB Group, said, “The joint venture brings together Malaysia’s premier investment bank and Singapore’s leading real estate and property management company. Our ambition is for CMM to be the forerunner and leading player in real estate fund management in Malaysia. We believe that there is tremendous potential in the real estate sector in Malaysia. The backdrop is of a strong macro economy, high savings rates and low interest rates. We see the availability of not only prime properties at attractive yields but also underperforming properties with attractive upside potential. We also note the growing desire of companies in Malaysia to focus on their businesses and raise capital by selling non-core assets, especially properties.”
Mr Hiew Yoon Khong, CEO of Mapletree said, “We are delighted to work with CIMB Berhad, the leader in the Malaysian capital markets, to form a Malaysia-based real estate fund management company, CIMB Mapletree Management Berhad. This collaboration brings together two partners with complementary strengths – Mapletree with our real estate knowledge and expertise, and CIMB, with its extensive local network and proven structured and corporate finance capabilities. Together, we aim to build Malaysia’s first integrated real estate fund management platform to develop high-quality property funds catering to both domestic and international institutional investors. We are confident that CM-1 and the Islamic real estate fund will fulfill an important role in supporting and participating in the development of the Malaysian real estate market.”
He further added, “This latest venture underscores Mapletree’s strategic focus to become more knowledge-based and to become a top-flight real estate capital manager in the region by utilizing both our real estate and related financial skill sets We have made it our ethos to develop effective and innovative solutions for the real estate industry and establish diverse property funds to widen the investment offerings in the sector. We see the joint venture with CIMB as key to this business strategy and CM-1 and the Islamic real estate fund as a long-term property fund platform in Malaysia.”
