CapitaLand Sells $1.3B Mall Portfolio in China

The Singapore-based real estate company will sell the collection, which totals roughly 8.6 million square feet, to China Vanke Co. The transaction is expected to close later this year.

CapitaMall Chengnanyuan, Nanchang
CapitaMall Chengnanyuan, Nanchang

CapitaLand Ltd. is focused on restructuring its portfolio for future growth, and its most recent transaction marks a major step forward. Acting through its wholly owned shopping mall business, CapitaLand Mall Asia, the Singapore-based real estate company just entered inked a deal to sell 20 malls in China for approximately $1.3 billion.

CapitaLand is selling the assets to China Vanke Co.’s commercial unit SCP Group, according to Reuters“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,” Lim Ming Yan, president & group CEO of CapitaLand Ltd., said in a prepared statement.

Consisting of approximately 8.6 million square feet spanning 19 cities, the portfolio includes, to name a few: CapitaMall Beiguan in Anyang; CapitaMall Chengnanyuan in Nanchang; Quanzhou’s CapitaMall Quanzhou; and CapitaMall Zhaoqing Zhaoqing.

CapitaLand expects to close the portfolio sale in the second quarter of 2018, pocketing roughly $495 million on the transaction.

CHINA’S MALLS IN HIGH DEMAND

As many U.S. malls grapple with lackluster sales–due in no small part to competition from the world of online retail–China’s shopping mall sector continues to fare well.

 “Even with wide-spread e-commerce physical shopping has in many ways found its place among consumers. This has supported stable growth of shopping malls,” according to a third quarter 2017 report by commercial real estate services firm Knight Frank.

Photo courtesy of CapitaLand Ltd.