CapitaLand Group is looking to increase its foothold in China with a $S800 million China REIT.
China REIT will be listed in Singapore and will hold seven assets, which includes the already well-traded Anzhen Mall in Beijing.
It will also have first right to buy assets owned by the CapitaRetail China Development Fund and CapitaRetail China Incubator Fund, which together have a fund size of over $US1 billion.
In addition, CapitaMall Trust, the group’s listed retail REIT in Singapore, will be offered up to a 20% stake in the new REIT.
The Development Fund, which has a fund size of $US600 million will invest in retail mall development projects located in China.
While the Incubator Fund, which has a fund size of $US425 million will invest in warehouse retail properties with the potential to generate quality income after the repositioning of the property, enhancing the asset or on completion of leasing activities.
CapitaLand’s investment is approximately 45% in the Development Fund and 30% in the Incubator Fund.
The remaining stakes in the two Funds are held by insurance companies, pension funds and corporations.
CapitaLand Group’s chief executive Liew Mun Leong said with this successful closing of the two Funds, the group now has a comprehensive and robust integrated China retail mall strategy.
Recently, the group announced joint ventures to build more affordable homes that align with China’s policy measures for a healthy real estate market.
“With the listing of the China Retail REIT in Singapore by 2006, we would have also significantly scaled up our assets under management to be an important contributor to the group’s earnings,” he added.
CapitaLAnd Retail chief executive Pua Seck Guan said given China’s growth prospects, the group is confident that the China Retail REIT will be well-received by both individual and institutional investors in Singapore and overseas.
By Nelson Yap
