CapitaLand divests equity stake in non-core investment for HK$2,831 million
Disciplined capital recycling continues to gain momentum
Singapore, 1 July 2019 – CapitaLand today announced that it has, through its wholly owned subsidiary CapitaLand (LF) Cayman Holdings Co. Ltd (“Vendor”), entered into an agreement to divest its entire 24.09% stake in Hong Kong-listed Central China Real Estate Limited (CCRE) to Joy Bright Investments Limited, an existing shareholder of CCRE.
The sale consideration is approximately HK$2,831 million (about S$496) million, which is equivalent to HK$4.30 per share. CCRE last traded at HK$3.45 per share on 28 June 2019. The divestment is targeted for completion in 3Q 2019.
Mr Lucas Loh, President, China, CapitaLand Group, said: “As part of our proactive portfolio management, we regularly review our investments and evaluate opportunities that will enhance returns and complement the Group’s strategy. CapitaLand’s stake in CCRE has generated stable returns over the years. In view that CCRE operates primarily in Henan Province, outside of CapitaLand’s core city clusters, the divestment would allow us to reallocate capital to other opportunities in our core businesses.”
Mr Loh added: “CapitaLand will remain disciplined in recycling our capital for reinvestments, with an annual divestment target of at least S$3 billion. In addition to divestments to unrelated parties, we will continue to tap CapitaLand’s established fund management platform, which includes its stable of real estate investment trusts and funds, to free up capacity on CapitaLand’s balance sheet for more growth opportunities. This reinforces our commitment to build CapitaLand’s fund management platform in the process and contributes towards augmenting our total assets under management.”
"China is an important core market for CapitaLand and we continue to hold a long-term view of our business in the country. Upon completing the acquisition of Ascendas-Singbridge business, CapitaLand’s enlarged portfolio in China will be organised along three business lines – residential and urban development; retail and commercial; and business parks. We will leverage our end-to-end value chain offerings, ranging from investment and fund management to development and operations, to grow CapitaLand’s scale in our core city clusters.”
CapitaLand’s five core city clusters in China comprise Beijing/Tianjin, Shanghai/Hangzhou/Suzhou/Ningbo, Guangzhou/Shenzhen, Chengdu/Chongqing/Xi’an and Wuhan.