Singapore real estate giant CapitaLand is selling partial stakes in a group of companies that own six of its Raffles City developments in China to Ping An Insurance for 46.7 billion yuan.
The portfolio comprises Raffles City Shanghai, Raffles City Beijing, Raffles City Ningbo, Raffles City Chengdu, Raffles City Changning, and Raffles City Hangzhou, CapitaLand said in a statement.
After the transaction, CapitaLand will retain an effective stake of 12.36% to 30% in each development. The company will also continue to provide asset management services for the developments and earn fee income.
Targeted for completion in the third quarter of this year, the transaction is expected to provide CapitaLand net proceeds of more than S$2 billion.
Including this transaction, CapitaLand has announced gross divestments of about S$11.2 billion year-to-date. This is more than three times its annual divestment target of S$3 billion.
CapitaLand China CEO, investment and portfolio management Puah Tze Shyang said part of the unlocked capital will be used to support the group’s investment pivot to new economy assets, where the tenants typically enjoy robust fundamentals and supportive regulatory environment.
Examples include business parks, logistics, and data centers, said Puah. “CapitaLand plans to grow our China exposure in this sector to S$5 billion over the next few years, from the S$1.5 billion as at end 2020,” he added.
In line with this investment strategy, CapitaLand announced in April 2021 that it is investing 3.66 billion yuan to acquire its first hyperscale data centre campus in Shanghai, China.
CapitaLand group CEO Lee Chee Koon said the company is looking forward to forging more capital partnerships with China’s domestic institutional investors to diversify its investor base. He added that the company has built an investment property pipeline of S$24.4 billion of assets in China.
“Our recent registration as a private equity fund manager in China allows us to carry out RMB-denominated capital raising, as well as provide fund management services in China. It has opened up more capital partnership opportunities with domestic institutional investors for CapitaLand,” said Lee.
CapitaLand owns and manages a global portfolio worth about S$137.7 billion as of March 31, 2021. Its portfolio spans across diversified real estate classes, including commercial, integrated development, urban development, as well as lodging and residential.
With a presence across more than 240 cities in over 30 countries, the group focuses on Singapore and China as its core markets, while it continues to expand in markets such as India, Vietnam, Australia, Europe and the US.