CapitaLand wins bid for two prime residential sites totalling 150,000 square metres in Guangzhou, South China
Ramping up of pipeline in China gathers momentum with the plots yielding another 1,300 homes by 2021
Singapore, 14 August 2018 – CapitaLand today announced that it has been awarded two prime residential sites in Guangzhou, South China, at a price of RMB2.05 billion (about S$409.3 million). The sites, measuring about 150,000 square metres in total GFA, is set to build up to 1,300 homes by 2021, catering to first-time home buyers and upgraders. This award comes hot on the heels of CapitaLand’s recent acquisition of a mixed-use site in Chongqing in June 2018, which will yield more than 2,100 residential units.
The two newly awarded residential sites are located in the heart of Zengcheng District, the engine of Guangzhou’s industrial growth and the site of the city’s future second international airport. Zengcheng is also home to well-known companies such as FOXCONN and Honda, as well as the upcoming Guangzhou Education City. The government plans to grow the district’s population from the current 1.15 million to 2.1 million by 2020, making Zengcheng the fastest-growing district in Guangzhou. Part of a mature residential zone, the sites are surrounded by well-established amenities including malls, schools, a hospital, a library and other residential developments.
Mr Lim Ming Yan, President & Group CEO of CapitaLand Group, said: “CapitaLand is pleased to win these two prime residential sites in Guangzhou, a first-tier Chinese city and the economic powerhouse of South China with strong fundamentals. This is our second acquisition in China in less than three months, as we gather momentum in replenishing our land bank. These 3,400 units in Guangzhou and Chongqing are a timely addition to our China residential pipeline, as we ready ourselves to release another 4,000 units for sale by the end of 2018. CapitaLand remains optimistic about the prospects of China’s residential market, where strong housing sales have continually contributed to the Group’s earnings.”
Mr Lim added: “In the first six months of 2018, CapitaLand has exceeded our full year capital recycling target of S$3 billion – a strong show of discipline and focus in unlocking value through our active portfolio reconstitution strategy. We are therefore looking forward to deploying these gains into higher yielding investments, such as this land bid in Guangzhou. CapitaLand will continue with our disciplined investment strategy to augment our land bank in fast-growing Chinese cities on a sustainable basis, while targeting an optimal mix between trading and investment properties.”
Mr Lucas Loh, CEO of CapitaLand China, said: “Guangzhou is part of five core city clusters that CapitaLand has identified for growth in China. Since entering Guangzhou in 2006, CapitaLand has developed many well-received residential projects in the city including Beau Monde, Dolce Vita, Citta di Mare and Vista Garden. We are delighted to be awarded the new sites in Guangzhou, which will create synergies with our ongoing Datansha Urban Redevelopment project in Guangzhou’s Liwan District that is being developed into residential and commercial projects in phases. We are confident of drawing on our years of track record in developing quality real estate products and services to create desirable homes that will meet the rising aspirations and needs of homeowners in Guangzhou.”
In 1H 2018, CapitaLand handed over more than 2,800 residential units in China to home buyers. In the second half of the year, CapitaLand expects to hand over more than half of the 8,000 units valued at a total of RMB16.2 billion (about S$3.2 billion) which had been sold in China. As at end 30 June 2018, China accounted for 37% of CapitaLand Group’s total assets.
In addition to residential developments, CapitaLand owns two shopping malls in Guangzhou, namely Rock Square and CapitaMall SKY+. Through its wholly owned serviced residence arm The Ascott Limited, CapitaLand also manages six serviced residences in the city, namely Ascott Guangzhou, Ascott IFC Guangzhou, Citadines LiZhiWan Guangzhou, Somerset Riviera Guangzhou and Springdale Serviced Residence that are operational, as well as Citadines Panyu Guangzhou that is slated to open in 2019.
In 2017, Guangzhou achieved a strong 7.5% economic growth, becoming the fourth Chinese city after Shanghai, Beijing and Shenzhen to record a GDP exceeding RMB2 trillion (about S$399.3 billion). This positions Guangzhou favourably to join the ranks of the world’s top 20 cities in terms of total economic output in the future, according to a report by Guangzhou Academy of Social Sciences.