[SINGAPORE] CapitaLand Investment (CLI) announced on Thursday (Apr 17) that it intends to launch its first real estate investment trust (Reit) in China, to be named CapitaLand Commercial C-Reit (CLCR).
The company said that CLCR will be seeded with the mature assets CapitaMall SKY+ in Guangzhou and CapitaMall Yuhuating in Changsha, with a combined value of about 2.8 billion yuan (S$499 million) and a total gross floor area of 168,405 square metres. The malls have an aggregate committed occupancy rate of 97 per cent.
CLI has applied to register the Reit with the China Securities Regulatory Commission (CSRC), and to list the Reit on the Shanghai Stock Exchange (SSE). The listing would mark the first time an international company has sought listing of a retail Reit on the SSE, and the first such retail Reit by a Singapore-based company if approved.
CLI said that the retail Reit will benefit from the Chinese government’s policies to stimulate domestic consumption.
Currently, both malls are owned within the CapitaLand Group’s portfolio, with CapitaMall SKY+ jointly owned by CLI and the group’s privately held CapitaLand Development (CLD), while CapitaMall Yuhuating is owned by CapitaLand China Trust (CLCT). Together, CLI, CLCT and CLD will hold at least a 20 per cent interest in CLCR, the company said. CLI will act as the sponsor and asset manager of CLCR.
CLI currently manages S$18 billion worth of retail assets across 43 properties in China. It said that it will continue to offer a quality pipeline of potential assets to support the growth of CLCR and CLCT.
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“The proposed listing of CLCR is in line with CLI’s strategy to pursue asset-light growth and expand in China by tapping domestic capital,” said CLI China chief executive officer Puah Tze Shyang. “It will further strengthen CLI’s listed funds platform, broaden our access to perpetual domestic capital, and enable us to grow our assets under management and recurring fee income.”
The launch of CLCR will offer CapitaLand’s existing China-based Reit, CLCT, to diversify its income and enhance its portfolio quality, said the company. Gerry Chan, CEO of CLCT’s manager, said: “This aligns with (CLCT’s) growth strategy as a diversified, multi-asset class Reit, anchored by a broad portfolio of retail properties, business parks, and logistics parks, while CLCR will focus on retail assets.”
He added: “CLCT’s investment mandate covers the Greater China region, including Hong Kong and Macau, whereas CLCR will concentrate exclusively on mainland China.”
CLI noted that the proposed listing of CLCR is conditional upon the approval of CLCT’s independent unitholders at an extraordinary general meeting, which will be convened at a later date, as well as regulatory approvals from CSRC and SSE.
Shares of CapitaLand Investment closed 2 per cent or S$0.05 higher on Wednesday at S$2.54.
