Launch Of S$875 Million Singapore Property Fund

Singapore/Dusseldorf, 26 July 01 - CapitaLand Commercial ("CCL") and the ERGO Insurance Group, Germanys second largest primary insurance group, today sealed an agreement to create a property fund with S$875 million (547 Mio. Euro) in assets, comprising 3 prime Singapore office properties. It is the first property fund denominated in Singapore dollars with both European and Asian institutional investors. 

The fund will have three prime CapitaLand office properties located in the Singapore central business district namely Temasek Tower, Pidemco Centre and The Adelphi. This portfolio possesses diversified income characteristics steady rental income from the fully-leased Temasek Tower, redevelopment upside from Pidemco Centre, and sales income from The Adelphi which delivers a unique, balanced risk-return profile to investors. 

Under the terms of the agreement, CCL will own 50% of the property fund, with the other 50% held by three insurance companies from the ERGO Insurance Group VICTORIA Lebensversicherung AG, DKV Deutsche Krankenversicherung AG and Hamburg-Mannheimer Versicherungs-AG, through a direct subsidiary that was set up only for this purpose. 

The insurance companies are represented by MEAG MUNICH ERGO AssetManagement GmbH and the framework of the fund and the underlying investments have been jointly structured by ERGO Trust GmbH ("ERGO Trust") and CapitaLand Commercial. 

In addition, the joint venture will leverage on CCLs core competencies such as asset management, marketing and leasing, project development and property management. 

Ed Ng, CEO of CapitaLand Commercial & CapitaLand Fund Management said, "We are pleased to be working with ERGO Trust which is one of Europes leading financial services companies with an established network of private and institutional investors." 

"The recent MAS (The Monetary Authority of Singapore) ruling makes provisions for local banks to lend to non-resident global investors, such as ERGO, to make commercial property investments in Singapore. CapitaLand Commercial, Singapores largest commercial property owner and manager, is the first property company to take advantage of this policy by creating a property fund with a strong foreign organisation like ERGO, to invest in Singapore commercial properties. This is possible only now, and not half a year ago," added Ed Ng. 

Frank-Rainer Vaessen, Managing Director of ERGO Trust said, "While we have a proven track record of serving the real estate investment needs of institutions and clients throughout Europe and the United States, we have been on the lookout for an established partner with significant Asian presence in Singapore and beyond. We are happy to have found CapitaLand Commercial, which is Singapores largest commercial property owner and manager, as the perfect partner for our strategic objectives. We are confident that this type of property fund is an interesting new investment opportunity for European institutional investors. TMW Real Estate Group (Munich) and The Greenwich Group International (Asia) Limited were instrumental in promoting ERGOs partnership with CapitaLand Commercial." 

He added, "We believe that the partnership between ERGO Trust and CapitaLand Commercial will bring the necessary skills and disciplines together to respond to global investors appetite for diversified investment products." 

Going forward, the partners will strive to seek more investment capital from European and Asian institutions in order to capitalise on opportunities available in Singapore and Asia. To this end, the partners will continue to rely on TMWs access to its network of European institutional investors. 

About the 3 Properties in the Fund: 

Temasek Tower 

Temasek Tower is a 52-storey Grade A office tower located in Singapores prime financial district of Shenton Way with a gross floor area of 669,473 square feet and a direct underground link to the Tanjong Pagar MRT station. Tenants include multi-national corporations and government institutions. 

The fund will purchase 19.92% shares of the investment holding company of Temasek Tower. 

Pidemco Centre 

Situated next to the bustling F & B (food and beverage) and entertainment hub at Boat Quay, Pidemco Centre is a landmark commercial building within the Central Business District, minutes away from the Raffles MRT station. It has the potential to be redeveloped into a Grade A office building with large floor plates of about 30,000 square feet. The redevelopment will add an additional 140,000 square feet to the existing gross floor area of 420,000 square feet. 

The fund will purchase 100% shares of the investment holding company of Pidemco Centre. 

The Adelphi 

The Adelphi is a 10-storey office-cum-retail strata-titled development with a net saleable area of 220,000 square feet. This accounts for 100% of the office space and 38% of the total retail space. The Adelphi is prominently located in Singapores civic and administrative district next to the City Hall MRT station and the Singapore Supreme Court. This development is ideal for individual strata-unit sale to owner-occupiers and investors looking for steady rental yields. 

The fund will purchase 100% shares of the investment holding company of 220,000 square feet of strata-titled units of The Adelphi. 

About CapitaLand Commercial and CapitaLand Fund Management: 

CapitaLand Commercial's vision is to transform commercial properties into living communities for the benefit of customers, delivering a level of service exceeding expectations. It owns, develops and manages an extensive portfolio of commercial properties in Singapore and the region with an asset base of S$7.7 billion. 

In Singapore, CapitaLand Commercial is the largest manager of office, retail and industrial space, with a portfolio of 10.9 million square feet of net lettable area in total. Overseas, it has investments in several key gateway cities including Shanghai, Hong Kong, Tokyo, Kuala Lumpur and London. 

CapitaLand Fund Management works closely with CapitaLand Commercial to identify attractive and stable assets for injection into new property funds to meet the different risk-return profiles of local and international investors. 

CapitaLand Commercial and CapitaLand Fund Management are business units of CapitaLand Limited, Southeast Asias largest listed property company with assets of about S$19 billion, spanning 54 cities and 23 countries. 

About ERGO Trust GmbH and MEAG MUNICH ERGO AssetManagement GmbH: 

ERGO Trust is a wholly-owned subsidiary of public-listed ERGO Insurance Group. One of its main business objectives is the evaluation, creation and marketing of investment opportunities in international real estate. 

With a strong focus on managing funds from institutional investors, ERGO Trust now has more than 30 institutional investors among its clients. Together with its sister company, MEAG MUNICH ERGO AssetMananagement GmbH, ERGO Trust manages directly and indirectly funds of total value exceeding EURO 11 billion for external third parties.