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Singapore, 4 April 2022 – CapitaLand Development (CLD), the development arm of CapitaLand Group, has been awarded two prime residential sites in China, one each in the cities of Wuhan and Chengdu, at a total price of RMB3.49 billion (about S$748 million).  CLD plans to build 1,581 quality homes catering to first-time home buyers and upgraders on these sites.  The construction of both projects will begin this year.  

The Wuhan site is located in the central business district (CBD), at the intersection of Fazhan Avenue and Huaihai Road in Qiaokou District.  Clinched at RMB2.31 billion (about S$495 million), it measures 45,709 square metres (sq m) in site area with a gross floor area (GFA) of 146,000 sq m.  The Chengdu site is located in Chenghua District, next to the middle ring road of Northeast Chengdu.  Secured at a price bid of RMB1.18 billion (about S$253 million), the site covers an area of 29,382 sq m with a GFA of 73,453 sq m. 

Mr Jason Leow, CEO of CLD, said: “China is one of three core markets^[1] for CLD, and we hold a long-term view of our business in the country.  We are optimistic that the decisive moves taken by the authorities to reduce speculation will promote the healthy and sustained development of China's housing market in the long term.  We are further encouraged by the Chinese government’s recent pledge on policy easing, which is expected to set China’s real estate sector on the path to recovery.  CLD stands ready to capitalise on attractive opportunities that have emerged, as seen in the two prime residential sites in Wuhan and Chengdu that we have acquired.  CLD remains committed to China and we will continue to stay invested in the market to build quality real estate products and deliver healthy returns for our stakeholders.”

Mr Tan Tze Shang, CEO of CLD (China), said: “With 28 years of experience in China, CLD is well-placed to take advantage of our strong financial position and in-house development expertise to invest in and maximise the potential of prime residential sites.  Wuhan and Chengdu are part of CapitaLand’s five core city clusters^[2] in China, where we have established a track record in developing and operating well-received business parks, integrated developments as well as residential, retail, office and lodging properties.  We will leverage our deep market understanding of both cities to create quality and affordable homes that meet the aspirations of homebuyers.  In addition to residential projects, we remain on the lookout for compelling investment opportunities across real estate asset classes to build a diversified and resilient portfolio.”

Wuhan is the capital of Hubei Province and the largest city in central China, with a population of more than 12 million people.  The city has largely recovered from the impact of the first wave of COVID-19, with its 2021 GDP surpassing pre-pandemic levels.  Urban population in Wuhan has been increasing, particularly in Qiaokou and neighbouring districts.  In 2021, some 19.86 million sq m of new homes were transacted in Wuhan’s city area, representing a growth of 12% year-on-year.  Specifically, the Wuhan CBD sub-market, where CLD’s site is located, has seen rising home prices since 2019 due to a limited supply.

Chengdu is the capital and largest city of Sichuan Province, with a population of more than 20 million people.  Its 2021 GDP was ranked the seventh highest among Chinese cities.  An economic powerhouse in the region, Chengdu is home to more than 300 of Fortune Global 500 companies, ranking first in Central and Western China.

According to the latest data, home sales in major Chinese cities are showing nascent signs of recovery since the beginning of March 2022 with policy easing.  In Wuhan, the housing transaction volume for March 2022 rose by about 50% month-on-month.  In Chengdu, the sales of new homes for the period January to February 2022 shown an increase year-on-year.  These statistics reflect improving homebuyer sentiment in both cities.

The newly acquired sites in Chengdu and Wuhan will boost CLD’s pipeline of residential units under development in China to 19,139 units.  Besides residential projects, CLD has been ramping up its investments in business parks and industrial properties in tandem with the global rise of the digital economy and China’s economic transformation.  Currently in Chengdu, CLD is developing a 22,000-sq m industrial site with a commercial component.  In Suzhou, CLD is developing a 220,000-sq m business park in Suzhou New District, in partnership with Mitsubishi Estate Co., Ltd.  CLD also has ongoing development activities in multi-phase large-scale projects including the China-Singapore Guangzhou Knowledge City, Datansha Island Urban Renewal Project in Guangzhou and La Botanica in Xi’an.

Note:

¹ CLD’s other two core markets are Singapore and Vietnam. 

² CapitaLand has identified five core city clusters to focus its growth in China. They are Shanghai/Hangzhou/Suzhou/Ningbo, Beijing/Tianjin, Guangzhou/Shenzhen, Chengdu/Chongqing/Xi'an and Wuhan.