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A multibillion-dollar deal is creating one of the world's largest real estate investment managers

Key Points
  • Major Asian real estate developer CapitaLand said on Monday it has entered into an agreement to buy two wholly owned units from Ascendas-Singbridge, a subsidiary of Singapore investor Temasek, in a cash and stock deal.
  • If the deal is approved, the new entity would become Asia's largest diversified real estate group, according to CapitaLand.
  • Its combined assets under management would exceed 116 billion Singapore dollars ($85.79 billion), which would put it among the top 10 real estate investment managers globally, CapitaLand said. 
A worker walks past a billboard displaying CapitaLand signage outside the company's Bedok Residences mixed development project construction site in Singapore on Feb. 18, 2013.
Munshi Ahmed | Bloomberg | Getty Images

Major Asian real estate developer CapitaLand said on Monday it has entered into an agreement to buy two wholly owned units from Ascendas-Singbridge, a subsidiary of Singapore state investment firm Temasek, in a cash and stock deal.

If the deal is approved, the new entity would become Asia's largest diversified real estate group, according to CapitaLand.

Its combined assets under management would exceed 116 billion Singapore dollars ($85.79 billion), which would put the firm among the top 10 real estate investment managers globally, CapitaLand said.

For its part, Temasek will receive about 3 billion Singapore dollars ($2.2 billion) in cash and another S$3 billion in new CapitaLand shares.

The move would give CapitaLand a "chance to be able to gain access to interesting asset classes in the new economy sectors that are driven by technology and e-commerce," Lee Chee Koon, president and group CEO, told CNBC's "Squawk Box" Monday morning.

"Assets like industrial, logistics/business parks — these will add a new excitement to the asset classes that CapitaLand is traditionally strong at, which are shopping malls, offices, residential and service apartments," he added.

Lee added that the deal would increase CapitaLand's options in places such as the United States, Europe and India, allowing the company to scale up and diversify its investments globally. The acquisition is projected to expand the company's presence to more than 180 cities across 32 countries.

The targets of the deal — Ascendas and Singbridge — are the holding companies for Ascendas-Singbridge Group's business, which includes managing Ascendas Real Estate Investment Trust, Ascendas India Trust and Ascendas Hospitality Trust.

Once the deal closes, Temasek's ownership of CapitaLand is set to increase from 40.8 percent to about 51 percent.