SINGAPORE — CapitaLand, majority-owned by Singapore state investor Temasek, announced on Monday (March 22) plans to split itself into two in a strategy aimed at pursuing growth as an asset-light company.

It is proposing to inject its real estate investment trusts and investment management unit into a separate listed Singapore entity and place its real estate development business under a Temasek unit.

The restructuring move by CapitaLand comes after it posted its first annual loss in nearly two decades in 2020, and like rival property developers, faces a tough outlook due to the coronavirus pandemic. It is one of Asia's largest real estate firms by assets with operations in Singapore, China, India and other markets.

CapitaLand plans to merge its investment management platform and lodging business into a separate listed entity called CapitaLand Investment Management (CLIM).

The company will also place its real estate development business under private ownership of CLA Real Estate Holdings, an indirect fully-owned unit of Temasek Holdings, which owns 52 per cent of CapitaLand.

"The overarching objective of the scheme is to sharpen the group’s focus and position it to be an asset-light and capital-efficient business through CLIM," CapitaLand said in a statement.

CLIM, which will be listed on the Singapore Exchange, is expected to become Asia's largest real estate investment manager with assets under management of about S$115 billion. It will also hold stakes in CapitaLand's listed real estate investment trusts and business trusts.

CapitaLand will become the privatised development arm and hold a 51.8 per cent stake in CLIM.

CapitaLand shareholders will receive an implied consideration of S$4.102 per share in cash and scrip, including a one-for-one equivalent stake in CLIM.

Trading in CapitaLand's shares was halted on Monday ahead of the announcement. Trading in units of its real estate investment trusts — Ascott Residence Trust, CapitaLand Integrated Commercial Trust, Ascendas, CapitaLand China Trust and Ascendas India Trust — was also halted.

CapitaLand has a market value of S$17.4 billion. The halted CapitaLand REITs have a total market value of S$33.6 billion. REUTERS