To grow its fund management business, CDL has made an investment in IREIT Global Group Pte. Ltd. (the manager of Singapore-listed IREIT Global), through its wholly-owned subsidiaries, City REIT Management Pte Ltd and City Strategic Equity Pte Ltd. CDL has acquired 50 per cent stake in IREIT Global Group Pte. Ltd. for S$18.4 million; and 78.6 million units (approximately 12.4%) of the total issued units in IREIT Global for about S$59.4 million.  The total consideration is about S$77.8 million. 

Listed on the Singapore Exchange since 2014, IREIT Global focuses on investing, directly or indirectly, in income-producing office, retail and industrial properties in Europe. Its current portfolio, which comprises five freehold office properties in Germany’s cities of Berlin, Bonn, Darmstadt, Munich and Münster, is valued at €504.9 million (about S$800 million). Annualised yield is about 8.0%.

CDL Group Chief Investment Officer Mr Frank Khoo said, “As part of CDL’s transformation, we are developing our fund management business through organic growth coupled with the acquisition of assets and platforms. This investment in a REIT is in line with our aim to achieve AUM of US$5 billion by 2023. Besides being earnings accretive with immediate contribution to our recurring income through management fees and attractive yield, the investment in IREIT Global complements our existing CDL Hospitality Trusts and will strengthen our REIT management expertise.”

“This deal will also enhance CDL’s diversification by increasing our presence in established European economies such as Germany, which has continued to develop physical and digital infrastructure to draw in talent and capital. Consequently, Germany has attracted companies looking to establish or expand their European presence, which has benefitted its economy. This has also translated to tightening cap rates, increasing rents, and decreasing vacancies across the country. We have confidence in the long-term fundamentals of the established European economies and will continue to seek opportunities to acquire assets with deep value, capitalising on attractive pricing and yields in key locations.”

“Through our asset management and enhancement expertise, we can add value and potentially recycle capital by injecting properties into IREIT Global. We will continue to explore investments in suitable platforms to grow our fund management business.”