CapitaLand is divesting partial stakes in six Raffles City developments in China for RMB46.7 billion (about S$9.6 billion).
CapitaLand has signed a conditional agreements with Ping An Life Insurance Company of China, Ltd. to divest partial stakes in Raffles City Shanghai, Raffles City Beijing, Raffles City Ningbo, Raffles City Chengdu, Raffles City Changning (Shanghai) and Raffles City Hangzhou.
CapitaLand will retain an effective stake of 12.6% to 30% in each development. Under its signature “Raffles City” trademarks, CapitaLand will also continue to provide asset management services for these developments and earn fee income.
CapitaLand said the transaction is expected to generate for CapitaLand net proceeds of more than S$2 billion.
”Today, there are nine Raffles City developments in China. Besides the six Raffles City developments in the transaction, there are Raffles City Shenzhen, Raffles City Chongqing and the latest addition to the portfolio – Raffles City The Bund (Shanghai)” aid CapitaLand.
“We are pleased to welcome Ping An as a strategic partner on board our established Raffles City platform. CapitaLand will continue to hold stakes in and provide asset management services for these six Raffles City developments. We are well placed to drive and participate in their future growth. CapitaLand has built up an investment property pipeline of over S$24.4 billion of assets in China, with a proven capital recycling track record over the past 27 years. We are looking forward to forging more capital partnerships with China’s domestic institutional investors to diversify CapitaLand’s investor base,” said Lee Chee Koon, Group CEO, CapitaLand Group.
“Located in gateway cities with excellent connectivity to key transport nodes and designed by well-known architects, our signature Raffles City portfolio comprises the crème de la crème of CapitaLand’s integrated developments. For the six Raffles City developments in the transaction, their property value had appreciated since their respective completion to RMB46.7 billion; and they achieved a private fund Fee Related Earnings (FRE) / FUM ratio of approximately 62 basis points, averaged across 2008 to 2020. As mature assets offering stable recurring income, they offer an attractive investment proposition for our new onshore partner. We will build on the traction to further diversify CapitaLand’s investor base while continuing to maximise the property value and investment returns for our investors,” said Puah Tze Shyang, CEO, Investment and Portfolio Management, CapitaLand China.
CapitaLand announced in April 2021 that it is investing RMB3.66 billion to acquire its first hyperscale data centre campus in Shanghai, China.
“Part of the unlocked capital will be used to support the Group’s investment pivot to new economy assets such as business parks, logistics and data centres, forming a new pipeline for future recycling. CapitaLand plans to grow our China exposure in this sector to S$5 billion over the next few years, from the S$1.5 billion as at end 2020. The investment focus covers business parks, logistics and data centres, where tenants typically hail from new economy sectors that enjoy robust fundamentals and a supportive regulatory environment,” added Puah Tze Shyang.