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CapitaMalls Asia (CMA) is planning to acquire an additional 50 percent interest each in two Chinese malls — Hongkou Plaza and Minhang Plaza — for a total of S$949.7 million (US$789.0 million).
Subject to relevant government approvals, the proposed acquisition will raise CMA’s interests in Hongkou Plaza and Minhang Plaza to 72.5 percent and 65 percent respectively.
“These acquisitions will deepen our presence and leasing strength in Shanghai to capitalise on the expected growth in the retail and office sectors, and we have seen strong commitment from tenants for both malls,” said Lim Beng Chee, Chief Executive of CMA.
Hongkou Plaza has a strategic location as a transportation hub in the city, directly connected to two metro lines and opposite the Hongkou Football Stadium, a major landmark in northeast Shanghai.
Meanwhile, Minhang Plaza is a prime development comprising an eight-storey shopping mall and a 32-storey office tower. The shopping mall comprises four storeys above ground and two basement levels with retail space, as well as another two basement levels with parking lots. It has a total area of 30,464 sq m and a gross floor area (GFA) of 197,908 sq m.
“For Minhang Plaza, we expect that after a year of its opening, we should achieve a yield of at least 5.0 percent for the mall while Hongkou Plaza is targeting at least 4.0 percent yield,” said Lim. “The successful opening of these two malls is a testament to our leading leasing network, competitiveness and execution capabilities as a team.”
CMA has six shopping malls in Shanghai, which include Raffles City Shanghai, CapitaMall Qibao, Raffles City Changning and an integrated development in Luwan, as well as Hongkou Plaza and Minhang Plaza.
“The additional rental income from these two large malls will start contributing to our bottom-line for the rest of this year. We remain positive on China and Shanghai’s strong economic fundamentals. With these acquisitions, China will account for about 42 percent of CapitaMalls Asia’s total property portfolio by property value,” Lim noted.
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