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CapitaLand, via its fully-owned shopping mall business CapitaLand Mall Asia, has agreed to divest its share of interest in a group of companies that hold 20 retail malls in China for 8.37 billion yuan (about S$1.71 billion).
Excluding car park, each mall features an average gross floor area (GFA) of around 40,000 sq m. In a release, CapitaLand noted that the malls are spread across 19 cities.
It revealed that the transaction, which is targeted for completion in Q2 2018, is expected to generate net proceeds of around S$660 million and a net gain of around S$75 million.
The company explained that the loss of recurring income arising from the transaction will be limited considering that the 20 malls accounted for only about four percent and seven percent of CapitaLand’s respective total and China shopping mall valuation as at 30 June 2017.
“China is now sitting on the cusp of transformative changes to its retail industry, characterised by a burgeoning middle class and the rising popularity of omni-channel retailing. CapitaLand is thus seizing this window of opportunity to reconstitute our mall portfolio with a sharper geographical focus that enhances our capacity to capture growth opportunities in China,” said Lim Ming Yan, president and group CEO of CapitaLand Limited.
“Unlocking the value of mature assets for reinvestment into new growth opportunities is a hallmark of CapitaLand’s capital recycling strategy. We will continue to invest in dominant assets in core Chinese city clusters, where we already enjoy a competitive advantage,” he said.
“The rejuvenated portfolio will enable CapitaLand to respond more effectively to the paradigm shifts in Chinese consumer behaviours, and strengthen our position as we continue to tap the growth in China’s rapid urbanisation.”
This article was edited by Keshia Faculin.
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