As part of its capital management strategy in China, CapitaLand has entered into an agreement to divest its interest in companies that hold Innov Center in Shanghai’s Yangpu District to CapitaLand Asia Partners I (CAP I), at a price that takes into account an agreed property value of RMB3,101 million (about S$621 million).
Targeted for completion in 3Q 2019, the proposed injection of Innov Center into CAP I comes a month after the discretionary real estate equity fund’s first closing. Other pipeline assets for CAP I include Pufa Tower, an office development in Shanghai’s prime Lujiazui CBD.
Mr Lee Chee Koon, President & Group CEO, CapitaLand Group, said: “Shanghai Innov Center, a predominantly office integrated development located in a mature, technology-focused decentralized office market, was acquired in 2017 to be the seed asset to kickstart CapitaLand’s discretionary fund business.”
“Upon the successful first closing of CAP I, the property will now be transferred to the fund from CapitaLand’s balance sheet.”
Mr Lee said: “Active and disciplined asset recycling is an important part of CapitaLand’s strategy to enhance returns and to rejuvenate and rebalance our portfolio. To this end, we have set an annual divestment target of at least S$3 billion.
“Looking ahead, CapitaLand’s transformational transaction to acquire the business of Ascendas-Singbridge will strengthen our development pipeline, expand our slate of REITs and funds, and increase our scale in investment properties across geographies and asset classes. The enlarged CapitaLand entity will also provide us with a robust pipeline of assets to enrich our fund management platform to build scale, synergy and sustainable growth in our core markets.”
Mr Lucas Loh, President & CEO of China, CapitaLand Group, said that CapitaLand’s signature Raffles City portfolio demonstrates its established developer-owner-operator capabilities.
It is also a hallmark of our successful fund management strategy in China. By working with capital partners in our investments, the company has greater agility to seize quality acquisition opportunities. This is exemplified in the 50:50 joint venture between CapitaLand’s Raffles City China Investment Partners III and Singapore’s sovereign wealth fund GIC to acquire Raffles City The Bund last year.
This landmark integrated development located in the heart of Shanghai’s North Bund has obtained Temporary Occupation Permit this month and will be opening in phases from 2H 2019.
Mr Loh added: “The enlarged CapitaLand portfolio will sharpen our competitive advantage across our five core city clusters in China. ”
“Leveraging our end-to-end value chain offerings ranging from investment and fund management to development and operations, we look forward to enhancing CapitaLand’s real estate ecosystem with our partners to meet the changing needs of Chinese consumers as China enters new stages of urbanization and urban renewal.”