CapitaLand China Trust (CLCT), Singapore’s largest China-focused real estate investment trust (REIT), is acquiring a portfolio of four prime logistics assets in China for 1.68 billion yuan (about $260 million).
The acquisition marks CLCT’s foray into China’s logistics sector and increases its exposure to new economy asset classes, following its purchase of a portfolio of five business park properties early this year.
In a statement, CapitaLand China Trust Management Limited (CLCTML) said the proposed acquisition includes prime logistics assets in Shanghai, Kunshan, Wuhan, and Chengdu, which are key logistics hubs in China.
The portfolio of four modern logistics properties has a total gross floor area of 265,259 square meters with a committed occupancy of 96.3%. Three of the properties were completed between 2016 and 2018, while the fourth was completed in 2010.
The acquisition will be financed through a mix of debt and equity and is expected to be completed by end of 2021.
“We are pleased to mark CLCT’s entry into China’s burgeoning logistics sector with a quality portfolio of logistics assets, in an investment that is aligned with China’s plans for a domestic consumption-driven, higher-value and service-led economy,” said Tan Tze Wooi, CEO of CLCTML.
The acquisition, he added, will enable CLCT to tap China’s strong demand for logistics properties, which is supported by conducive government policies and boosted by an accelerated growth in e-commerce.
CLCT’s existing portfolio comprises 11 shopping malls and five business park properties with a total gross floor are of approximately 1.7 million square metres located across 10 leading Chinese cities.
In September 2020, CLCT expanded its investment mandate to cover multi-assets that are used primarily for retail, office, and industrial use. Under its five-year acquisition growth roadmap, CLCT plans to achieve a balanced portfolio mix of 40% in commercial/integrated developments, 30% in retail properties and 30% in new economy assets.
In June, CapitaLand announced that it successfully registered as a private equity fund manager (PEFM) with the Asset Management Association of China to carry out RMB-denominated capital raising and provide fund management services for prospective RMB funds in the country.