CapitaLand to grow financial svcs arm

SINGAPORE (Reuters) - CapitaLand (CATL.SI: Quote, Profile, Research, Stock Buzz), Southeast Asia's most valuable developer, plans to launch two more property funds worth a combined S$1 billion ($651 million) as part of its financial services expansion.

The group's assets under management would hit S$17-18 billion by the end of the year -- up from about S$14 billion now, Chief Executive Liew Mun Leong said on Monday.

"Our financial services make up less than 10 percent now but I would like our fund fees to be about 15-20 percent of our EBIT (earnings before interest and tax)," Liew told the Reuters Real Estate Summit in Singapore.

"We're still a real estate company essentially, but this would help us in our overall domain knowledge," he added.

The two new property funds, which will join CapitaLand's existing line-up of 10 funds, will invest in India and China with initial funds of S$500 million (US$325 million) each.

CapitaLand, 43-percent owned by Singapore state investor Temasek Holdings TEM.UL, has been aggressive in expanding its financial services business and controls five real estate investment trusts (REITs), including CapitaMall CMLT.SI -- Singapore's most-valuable property trust.

Liew said the group could launch another five property trusts based on its global portfolio, which includes office buildings in China and apartments in Japan.

He said CapitaLand's next REIT would likely be one based on its properties in China as its assets there offered high yields.

RESORTS AND CASINOS

CapitaLand, which earns up to 80 percent of its profit abroad, is also looking to expand its entertainment and leisure properties division, whose first investment was in a casino and shopping complex in Macau.

"Vietnam is a possibility and China is dying for entertainment resorts," Liew said.

But he declined to say how much the investments would be and where they would be located.

Liew said he was also keeping a close eye on Japan's liberalization of its casino industry as CapitaLand still wanted to work with casino operators MGM Mirage (MGM.N: Quote, Profile, Research, Stock Buzz) and Kerzner International -- its partners for its two failed bids to build Singapore's first two casinos.

Liew said he was still upbeat on CapitaLand's prospects in China, where it has assets worth some S$4.2 billion or about 20 percent of its total portfolio, despite Beijing's moves to curb property speculation.

"It's a demand-driven market. People are buying (property) with their own money, they are staying or buying for the purpose of rental yields. The government is not discouraging foreign investors per se but is seeking to ensure supply of real estate for urbanization," he said.