China Vanke To Buy CapitaLand’s Stake in 20 Chinese Malls

CapitaMall Chengnanyuan, Nanchang, Jiangxi Province

China Vanke‘s commercial property unit SCP Group is buying the interests of CapitaLand in 20 retail shopping malls in China for about $1.29 billion.

In an announcement, China Vanke said it was purchasing the 20 shopping malls from CapitaLand through a joint investment with Triwater Asset Management Holdings.

CapitaLand’s divestment will be carried out by its wholly owned shopping mall unit CapitaLand Mall Asia. The deal is expected to give CapitaLand net proceeds of about S$660 million and a net gain of about S$75 million.

Each mall has an average gross floor area (GFA), excluding car park, of about 40,000 square metres (sq m). They are spread across 19 cities, of which 14 are noncore cities where CapitaLand has a single mall in each.

The loss of recurring income arising from this transaction will be limited, as these 20 malls accounted for approximately 4 percent and 7 percent of the company’s respective total and China shopping mall portfolio valuation as at 30 June 2017, CapitaLand said in a press release.

Lim Ming Yan, President and Group CEO of CapitaLand Limited, said China is now sitting on the cusp of transformative changes to its retail industry, characterised by a burgeoning middle class and the rising popularity of omni-channel retailing.

“CapitaLand is thus seizing this window of opportunity to reconstitute our mall portfolio with a sharper geographical focus that enhances our capacity to capture growth opportunities in China,” Lim said.

Also Read: CapitaLand Posts S$1.07 Billion Profit in FY 2015

He said CapitaLand will continue to invest in dominant assets in core Chinese city clusters, where the company already enjoys a competitive advantage.

The rejuvenated portfolio will enable CapitaLand to respond more effectively to the paradigm shifts in Chinese consumer behaviours, and strengthen our position as we continue to tap the growth in China’s rapid urbanisation.”

Post-divestment, the company’s shopping mall network in China will comprise 491 malls, of which 45 are located in first- and second-tier cities. More than half of the malls are the retail component of integrated developments.

Among the Chinese cities, CapitaLand has the largest retail presence in Beijing and Shanghai where it owns/manages eight malls each, followed by Chengdu with six and Wuhan with four. –