ARA Asset Management Ltd. (ARA), a manager of real estate trusts partly owned by billionaire Li Ka-shing, and Straits Trading Co. (STRTR), a Singapore tin-smelting company, agreed to jointly invest in property.
Straits Trading will acquire a 20.1 percent stake in ARA for S$294.4 million ($238 million) from Li’s Cheung Kong Investment Co. and ARA Chief Executive Officer John Lim in cash and shares, the company said in a statement through the stock exchange. Straits Trading will then form a new company with Lim that will undertake property investments, excluding hospitality assets, with capital commitment of as much as S$950 million, it said.
The alliance comes as ARA said in March that it plans to double assets under management over five years as its private funds buy more properties. Straits Trading’s property portfolio, which includes an office tower in the island-state’s central business district and some residential assets, was valued at S$819.4 million according to a report by Knight Frank Pte in February.
ARA will manage Straits Trading’s investment property portfolio as a separate account, according to the statement. The new joint company will have aggregate initial capital of S$200 million, it said. The deal is subject to regulatory approval, it said.
ARA, which manages more than S$20 billion of assets through real estate investment trusts and funds, plans to expand with acquisitions and enhance existing properties, Lim said in an interview in March. Its real estate funds, which make up less than a third of assets managed by the Singapore-based company, are expected to increase to half in five years, he said then.
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