Vanke in $1.3 Billion Deal for CapitaLand Stakes in China Malls

By Pooja Thakur Mahrotri / Bloomberg | January 6, 2018 11:13 PM SGT
China Vanke Co. and its commercial property unit SCPG are part of a group buying stakes in 20 malls in China from Singapore’s CapitaLand Ltd. in a $1.3 billion deal.
The net proceeds may be about S$660 million ($500 million), with a net gain of about S$75 million, CapitaLand said in a statement Friday. Vanke said it teamed up with an entity called Triwater, in a deal that includes equity and shareholder loans.
The purchase will boost the clout of SCPG, which owns or manages 120 commercial real estate projects across 58 cities, according to the Chinese developer. The Vanke unit said it would keep looking to make more acquisitions. For CapitaLand, the deal is a way of rejigging its portfolio by shedding mall stakes in smaller cities.
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Vanke mall in Shanghai. (Photographer: Qilai Shen/Bloomberg)
After the exit, CapitaLand’s mall network in China will be increasingly focused on first- and second-tier cities, a positive development, according to Eli Lee, an analyst at OCBC Investment Research. A “rejuvenated portfolio” will let the company better respond to shifts in consumer behavior in a rapidly urbanizing country, said Lim Ming Yan, president and group chief executive officer of CapitaLand.
“We will continue to invest in dominant assets in core Chinese city clusters, where we already enjoy a competitive advantage,” said Lim.
— With assistance by Frederik Balfour, and Bei Hu
This story, written by Pooja Thakur Mahrotri for Bloomberg, first appeared on Jan 5.