CapitaLand to sell partial stakes in six Raffles City properties in China for $ 9.6 billion


SINGAPORE – Shares of CapitaLand surged when the market opened on Monday June 28 after the real estate giant announced it would divest partial stakes in six of its Raffles City developments in China for 46.7 billion yuan (S $ 9.6 billion) to Ping An Life Insurance Company China.

CapitaLand shares rose four cents or 1.1% to $ 3.72 at 10:30 am, while the Straits Times index was up 0.2%.

The group partially sells its stakes in Raffles City Shanghai, Raffles City Beijing, Raffles City Ningbo, Raffles City Chengdu, Raffles City Changning (Shanghai) and Raffles City Hangzhou.

It will retain effective stakes of between 12.6 and 30 percent in each development. The group currently has effective interests of 30.7 to 55 percent in the properties.

CapitaLand said it expects to earn net proceeds of more than $ 2 billion from the transaction, which is expected to close in the third quarter of 2021.

It also expects additional fee income from providing asset management services for these developments, said Lee Chee Koon, group chief executive.

CapitaLand China Managing Director Puah Tze Shyang said part of the unlocked capital will be used to support the group’s backbone of investing in new economy assets such as business parks, logistics and data centers, forming a new pipeline for future recycling.

CapitaLand plans to increase its exposure to China in this sector to $ 5 billion over the next few years, from $ 1.5 billion at the end of 2020, he added.

In line with this investment strategy, CapitaLand announced in April an investment of 3.66 billion yuan to acquire its first hyperscale data center campus in Shanghai.

With the latest transaction, CapitaLand has achieved gross divestments of around $ 11.2 billion since the start of the year, more than three times its annual divestment target of $ 3 billion, Lee said. At the same time, it increased its funds under management to $ 79.2 billion.

CapitaLand announced last week that it has registered as a private equity (PE) fund manager in China and expects a renminbi-denominated fund product in the fourth quarter of 2021 that could seize investment opportunities in the assets of the new economy.

Lee said Monday that the group’s PE fund manager status “has opened up more opportunities for capital partnership with domestic institutional investors for CapitaLand.”

“With multiple recycling vehicles and strategies, as well as diverse sources of capital, we are confident in our next stage of growth as a lean and capital efficient global real estate investment manager, focused on Asia,” a- he declared.

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