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CapitaLand to double its investment
in China
BEIJING -
Singapore-based property company CapitaLand plans
to double its investment in China over the next
few years by acquiring or merging retail malls.
The listed group has already poured 6
billion yuan (US$726 million) into China over the
past 10 years, approximately 8% of its global
total, making the country its second-largest
overseas market behind Australia.
But this
movement into the merger of retail malls marks a
change in tack for CapitaLand's Chinese
investments, which formerly focused on the launch
of office and apartment buildings.
"We
will possibly double the investment in the next
several years to expand our property business in
China," Lim Ming Yan, president of CapitaLand
China Holdings Group, told China Daily.
"We are seeking opportunities to acquire
retail malls in Shanghai since it is a big
commercial metropolis. Negotiations are under
way."
The company's wholly owned
subsidiary, CapitaRetail China Investment Pte Ltd,
recently signed a co-operative contract with the
Shenzhen International Trust & Investment Co
Ltd (SZITIC) to acquire a 51% equity stake in the
six project companies anchored by the Wal-Mart
chain of supercenters at a cost of 998 million
yuan ($121 million).
It also acquired a
100% equity stake in two retail malls from the
Beijing Hualian Group Investment Holding Co Ltd
for 1.746 billion yuan ($211 million) early this
month.
"What we have done in China will
create an opportunity for the acquisition of
future assets," said Liew Mun Leong, chief
executive officer of CapitaLand Group.
CapitaRetail China has been granted the
first right to acquire a majority of the retail
malls anchored by Wal-Mart, which SZITIC may
propose to develop, and Beijing Hualian.
Wal-Mart has a committed long-term
strategy for China, with the intention of opening
20 to 30 new supercenters in the next few years.
Liew said CapitaLand also has the
opportunity to create property funds to meet the
increasing demand of retail and institutional
investors for such financial products.
"Looking ahead, the properties could form
the portfolio of a China retail property fund
which has listing potential," he said.
At
present, CapitaLand relies mainly on overseas
private funds to collect capital for the projects
in China.
"But the procedures of using the
overseas capital is very complicated, involving
taxation and other matters," Lim said.
"We
have no property development fund or long-term
investment fund in China at the moment. But we
believe the market environment will change as
investors' demand grows," he said.
Should
a retail property fund be set up, it is likely to
be listed within two years, according to Goh Soon
Yong, general manager of Raffles City Shanghai,
who is now in charge of the retail mall
acquisition in China.
(Asia Pulse/XIC) |
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