Homegrown property giant CapitaLand is the overall winner in the real estate industry sector. From its roots as a statutory board’s department and a bank’s development arm, CapitaLand has grown to become one of Asia’s largest diversified real estate groups.
As at 30 Sept, it owns and manages a global portfolio worth about $133.3 billion, consisting of real estate classes ranging from commercial, retail, business park, industrial and logistics; as well as lodging and residential. Its two core markets are Singapore and China but it is present in over 30 countries including India, Vietnam, Australia, Europe and the US as well.
CapitaLand popularised active capital recycling within the real estate industry, sparking imitation from other developers and real estate funds. Nevertheless, with its six separately listed REITs and more than 20 private funds, CapitaLand is in a much better position to manage its overall capital base by actively buying and selling its assets to deliver sustainable returns to shareholders.
The company is not shy from making big, strategic moves. Notably, in June 2019, CapitaLand completed the acquisition Ascendas-Singbridge, which expands not just its assets base but also gives it a bigger presence in real estate sectors such as industrial properties. At $11 billion, it is the largest M&A deal between two Singapore entities to date.
Since its listing since 1971, United Industrial Corporation (UIC) has built up a diversified portfolio in real estate, hotels and even IT services. However, UIC is better known for its portfolio of prime commercial properties, which it comes to own via the acquisition of Singapore Land in 1990. This portfolio now consists of 2.5 million sf of office space such as Singapore Land Tower, Clifford Centre and SGX Centre. It also consists of some one million square feet of retail space at Tampines Plaza and Marina Square. UIC’s earnings have grown to $605.1 million in FY2019 December
2016 from $286 million in FY2016, giving it a CAGR of 28.4%, and earning it the top real estate company for this category.
The real estate company that delivered the highest weighted return on equity this year is Yanlord Land Group, which has been listed since 2006. The company, founded back in 1993, focuses on developing high-end residential projects such as in Shanghai and Nanjing. It claims the “Yanlord” brand name has become synonymous with quality within the property development industry. It now operates in 18 key high-growth cities within the six major economic regions of China. Besides residential properties, Yanlord has also developed high-quality commercial and integrated properties for a stronger recurring income stream.
Yanlord has been active in Singapore too. In February, it completed the acquisition of United Engineers, another Singapore-listed company, bringing to its fold investment properties such as UE BizHub City, UE BizHub Tower and UE BizHub West. In addition, Yanlord has two residential projects under development in Singapore, namely Leedon Green and Dairy Farm Residences.
With a weighted return of equity of 13.68 times during the evaluation period, Yanlord is deemed the category winner within its real estate peers.
