ARA Asset Management Limited Grows Private Funds Management Business With New Fund

ARA Asset Management Limited (SGX: D1R) is the only pure-play property fund management company listed in Singapore’s market.

The company manages public-listed real estate investment trusts and private real estate investment funds. In Singapore’s stock market, some of the REITs under the care of ARA Asset Management include Suntec Real Estate Investment Trust (SGX: T82U) and Cache Logistics Trust (SGX: K2LU).

Yesterday, ARA Asset Management announced that it would be creating a new fund, the ARA Harmony VI, to invest in a new iconic property in Shanghai, China.

The property in question is Century Link, a premium-grade integrated commercial development with a total gross floor area of 362,361 sqm. Century Link is located near a subway line interchange in the Lujiazui Finance and Trade Zone in Shanghai’s Pudong New District.

The transaction, valued at RMB20 billion (S$4.1 billion), would be the biggest single-asset property purchase in the Asia Pacific region in 2016 thus far.

The ARA Harmony VI fund, which is anchored by an established insurer, would significantly boost the assets under management (AUM) of ARA Asset Management’s private funds business.

At the end of June 2016, ARA Asset Management has S$29.7 billion in total AUM, of which S$7.0 billion reside in private funds. Therefore, the S$4.1 billion deal has the potential to boost the company’s AUM in the private funds segment by nearly 60%.

Overall, this marks a good achievement for ARA Asset Management. The company is currently trading at 15.5 times trailing earnings and offers a 3.6% dividend yield.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim owns ARA Asset Management.