CapitaLand Forms $300M US Apartment Venture

The Singaporean property giant has teamed up with an Austin, Texas-based firm to acquire and develop multifamily assets in the Southeast and Southwest.

Austin project. Image courtesy of CapitaLand

Singapore’s CapitaLand has struck a $300 million joint venture with an Austin, Texas-based partner to expand its multifamily portfolio in the Southeast and Southwest U.S., citing the resiliency of the nation’s apartment sector. The latest move builds upon the real estate giant’s 2018 debut in the U.S. multifamily market, when CapitaLand snapped up a 16-property West Coast portfolio from Starwood Capital Group for $835 million.

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To kick off the venture, CapitaLand and its partner—an undisclosed real estate investment, development and property management firm—have acquired a 4.7-acre land parcel in Austin which will be developed into a mid-rise, 341-unit apartment property slated for completion in 2023. CapitaLand holds an 80 percent stake in the project while its partner holds the remaining 20 percent.

The U.S. partner has developed more than 25,000 multifamily units across various markets over its 25-year history. Overall, the new strategic partnership plans to acquire and develop multifamily assets totaling $300 million in gross asset value, investing in Southeast and Southwest markets.

Kicking things off

The Austin project site is located adjacent to the upcoming McKalla Place Major League Soccer Stadium, which is under construction in the city’s North Burnet area, less than 10 miles north of downtown. Expected to open in the spring, the home of the Austin FC soccer team at the intersection of Burnet Road and Braker Lane will seat more than 20,000 people.

Austin project. Image courtesy of CapitaLand

Austin-based Capella Capital Partners is developing Arena Tower, a 19-story office building, next to the future stadium at 10615 Burnet Road. A CapitaLand representative told Multi-Housing News that its apartment project is unrelated to that firm. The new multifamily project is also a 5-minute drive from The Domain, a mixed-use hub that spans more than 1.8 million square feet of retail space along with office and hotel facilities and 3,700 apartments.

CapitaLand’s upcoming community will feature studios, one- and two-bedroom apartments with separate work and living areas and will include about 1.4 acres of outdoor recreational spaces, designed to cater to professionals working from home. The property will also have hand sanitizing stations and anti-microbial surfaces installed throughout the shared spaces.

U.S. growth

CapitaLand International’s Managing Director for USA Dang Phan said in a statement that the company’s multifamily properties in the U.S. have a current committed occupancy rate of about 95 percent, following value-add improvements. The firm’s 2018 acquisition spanned 3,878 units across the metropolitan areas of Seattle, Los Angeles, Denver and Portland, Ore.

In addition to that landmark deal, CapitaLand has raised its profile in the U.S. hospitality market through its wholly owned lodging arm, The Ascott Ltd., and its hospitality trust, Ascott Residence Trust. The group’s Ascendas Real Estate Trust also owns 30 office properties in the U.S., including two office buildings leased to tech firms Pinterest and Stripe in San Francisco, which Ascendas REIT picked up in November.

Through the latest multifamily investment, CapitaLand will now have some $3.5 billion of assets under management in the U.S., part of a roughly $100 billion global portfolio.

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