Capitaland Investment Management

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(11-02-2024, 10:15 AM)EnSabahNur Wrote: I didn't realise the point about the Cap-Ascendas merger being done for scale. Can I trouble you to elaborate on that?

hi EnSabahNur,

Before the merger, Capitaland manager was mainly in commercial/retail/hospitality, while Ascendas was managing business parks/industrial. So their merger is highly complimentary and not purely "done for scale". Of course in the AUM business, efficiencies of scale accelerate beyond the normal operating leverage that a business generally enjoys, as they centralize many of the operations (Treasury, asset managers etc) and business offerings (eg. property management).

In my earlier post, I was just saying that the current CLIM would actually be in a much smaller scale if not for the 2019 acquisition. CLIM current EV is ~27bil (14bil market cap + 13bil debt), so current prices is a good approximation to development/investment mgt BU split in late 2021. Ascenda-Singbridge was valued at ~11bil EV and so a very dirty quick back-of-envelope approximation indicates that CLIM scaled up by ~25-30% with that 2019 acquisition.
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Thanks Weijian
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