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Mon, Nov 16, 2020-9: 36 am
CAPITALAND aims to increase its exposure to China in the “new economy” sector to S $ 5 billion in the coming years, from S $ 1.5 billion.
This will be done by reallocating some of the capital from asset recycling to assets in the new economy, such as business parks, logistics and data centers, the real estate giant said on Monday.
CapitaLand said that tenants in this sector of the “new economy” generally enjoy “strong fundamentals and a supportive regulatory environment.”
As part of CapitaLand’s active recycling, CapitaLand Retail China Trust (CRCT) has been designated as the group’s real estate investment trust (Reit) platform for non-accommodation assets in China, with access to the CapitaLand pipeline in the country .
CRCT will also continue to explore third-party opportunities and acquire from the market, CapitaLand said. Over time, CRCT plans to have a target portfolio mix of 40 percent in integrated development, 30 percent in retail, and 30 percent in new economy.
In line with these goals, CapitaLand has entered into agreements to sell its stake in companies that own five business park properties and the Rock Square Mall in China to CRCT, it announced earlier this month.
The five properties of the business park are located in Suzhou, Xian and Hangzhou, while Rock Square is located in Guangzhou. This makes the proposed CRCT acquisition the largest to date.
The total acquisition cost has been estimated at around S $ 822.4 million, the Reit said in November.
Upon completion of the proposed deal, CapitaLand plans to enter into a joint venture with CRCT in the Ascendas Xinsu portfolio in Suzhou, with a view to extracting value from this mature asset through redevelopment, it said on Monday.
CRCT also proposed earlier this month to acquire an 80% stake in Phase I of the Singapore-Hangzhou Science and Technology Park (SHSTP) and an 80% stake in Phase II of SHSTP.
CapitaLand added that this expansion objective goes hand in hand with the group’s strategy to take advantage of China’s economic transformation by focusing on technology, services and domestic consumption.
DBS Group Research said in October that CRCT was a “Chinese giant in the making,” noting that it had an addressable portfolio of more than S $ 33 billion from its sponsor CapitaLand last month.
CapitaLand’s stock was trading at 2.91 Singaporean dollars as of 9.22am on Monday, an increase of 0.07 Singaporean dollars or 2.5%.
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