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CapitaLand and CapitaLand Retail China Trust (CRCT) announced on Tuesday (28 November) that are jointly acquiring the existing Rock Square mall at China’s Haizhu District in Guangzhou for 3.36 billion yuan (approx. S$688.9 million).
This represents the former’s second mall and CRCT’s first in Guangzhou, the provincial capital of Guangdong Province. In particular, CapitaLand will hold a 49 percent stake in the joint venture, while the latter will control 51 percent.
“The acquisition marks CRCT’s strategic entry into another first-tier city after Beijing and Shanghai. It represents a progression of our portfolio reconstitution strategy, whereby capital from the sale of CapitaMall Anzhen is recycled into a multi-tenanted mall with a longer balance tenure and stronger growth potential,” said Tan Tze Wooi, CEO of the trust manager, CapitaLand Retail China Trust Management.
Touted as one of Haizhu District’s biggest malls, the five-storey shopping complex has a net leasable area (NLA) of 53,107 sq m and gross floor area of 83,591 sq m, excluding its 600-unit car park.
It opened in July 2013 and has an occupancy rate of 96.4 percent as of June 2017, with major tenants such as ZARA, Innisfree, AEON, Pull & Bear, UNIQLO and Victoria’s Secret.
“In view that leases accounting for over half of the mall’s total rent are up for renewal between 2018 and 2020, the timely acquisition will present us with a window of opportunity to achieve rental uplift through active tenant mix adjustments, unit reconfiguration and improvements to the layout,” noted Tan.
The transaction is expected to be completed by the first quarter of next year.
“When completed, the acquisition will boost CapitaLand’s retail presence in Guangzhou, where we currently own and manage CapitaMall SKY+, which opened in 2015. By leveraging on our experienced team in Guangzhou to manage the new mall, we will be able to benefit from the network effect of an enlarged portfolio,” added Jason Leow, Chief Executive of CapitaLand Mall Asia.
(Photo: CapitaLand)
This article was edited by Keshia Faculin.
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