Hongkong Land Launches Singapore's Largest Private Real Estate Fund in $6.5 Billion Strategic Shift
In a bold strategic realignment, Hongkong Land has unveiled Singapore's largest-ever private real estate fund, a S$8.2 billion ($6.5 billion) vehicle focused on prime commercial assets. The launch signals a fundamental shift for the historic developer as it pivots decisively towards an asset-light fund management model under CEO Michael Smith.
The Singapore Central Private Real Estate Fund (SCPREF) will target landmark properties in the city-state's core business district. Its initial portfolio is a who's who of Singaporean commercial real estate, including Asia Square Tower 1, One Raffles Link, and key towers within the Marina Bay Financial Centre.
"Our vision is to build a series of funds alongside high-quality institutional partners, transforming a significant portion of our revenue stream into recurring management fees," Smith stated in an exclusive interview. The fund's open-ended structure is designed to attract long-term capital.
Cornerstone investors include the Qatar Investment Authority (QIA) and Dutch pension giant APG Asset Management, with another undisclosed Southeast Asian sovereign wealth fund also participating. "Sovereign wealth funds require certainty and capital preservation," Smith explained, highlighting the appeal of such prime, income-generating assets.
The QIA confirmed its investment, stating the move aligns with its strategy of partnering with top-tier operators to secure resilient, long-term returns from global real assets.
Background & Market Context: The mega-fund arrives as Singapore's property market shows robust health, with 2025 investment sales soaring 27% to $26.9 billion—a peak not seen since 2017. Hongkong Land's leadership is betting on continued strength in commercial space, citing constrained new supply in the Central Business District. This optimism persists despite a slight 0.6% dip in the company's Singapore-traded shares on the announcement day, following a period where its stock value has doubled over the past year.
Strategic Imperative: The fund is the centerpiece of Smith's turnaround plan since taking the helm in 2024. Hongkong Land, founded in 1889 and a cornerstone of Hong Kong's Central district, has been battered by prolonged weakness in the mainland Chinese and Hong Kong residential markets. First-half 2025 revenue fell 23% to $751 million, though it returned to profitability. Smith is swiftly shedding non-core residential operations, exemplified by last November's $579 million sale of its MCL Land unit, to refocus on commercial holdings and fund management—a trend also seen with peers like CapitaLand and Mapletree.
"We've been a bit like a herbivore, just collecting rent," Smith quipped, expressing a desire for the company to become more active. His ambitions extend beyond Singapore to Asian "gateway cities" like Tokyo, Seoul, and Sydney—hubs defined by finance, tech, and professional services.
Expert Commentary
David Chen, Real Estate Analyst at Sterling Capital: "This is a textbook pivot to an asset-light structure. By bringing in sovereign capital, Hongkong Land de-risks its balance sheet and secures fee-based income. It's a necessary evolution given the headwinds in its traditional markets."
Priya Sharma, Portfolio Manager, Global Infrastructure Fund: "The scale and investor pedigree are impressive. It validates Singapore's status as a safe-haven for real estate capital. This fund will likely set a benchmark for future large-scale, institutionally-focused property vehicles in the region."
Mark Reynolds, Editor, 'The Property Watchdog' Blog: "So a colonial-era landlord, struggling because it overextended into volatile residential markets, now wants to play fund manager with other people's money? This feels less like a strategic pivot and more like a desperate retreat. Let's see if the 'herbivore' can suddenly develop a predator's instincts—history suggests otherwise."
Professor Eleanor Tan, School of Urban Studies, National University: "The concentration of such vast capital into Singapore's CBD raises important questions about market accessibility and diversity. While it underscores confidence in the city's fundamentals, we must watch for potential inflationary pressures on prime asset prices and rents, potentially crowding out smaller players."
This report was developed from original reporting by Fortune.com.