皇冠体育app

CapitaLand buys retail outlets
By Liu Jie (皇冠体育app Daily)
Updated: 2005-01-06 08:40

Singapore-based CapitaLand, a leading property company in Asia, has acquired two large stores in Beijing. The move is part of the company's aim to form its proposed 皇冠体育app retail property fund with listing potential.

CapitaLand Retail 皇冠体育app Pte Ltd, a solely-owned subsidiary of CapitaLand Limited - one of Asia's largest listing companies, signed a co-operative agreement earlier this week with Beijing Hualian Group Investment Holding Co Ltd to obtain two of Hualian's outlets in the capital city, namely Anzhen and Wangjing stores, for 1.746 billion yuan (US$210.36 million). The two stores will be wholly owned by CapitaLand Retail 皇冠体育app.

Under the same agreement, a 50-50 retail management joint venture will also be established with Beijing Hualian to provide marketing and retail management services for the under-construction Wangjing store as well as other properties that CapitaLand Retail 皇冠体育app may acquire in the future.

As one of the largest chain retailers in 皇冠体育app, Beijing Hualian, with two listed subsidiaries on the Shenzhen and Shanghai stock exchanges, has a portfolio of 68 outlets comprising department stores, shopping malls and hypermarts spanning 35 cities over 23 provinces in 皇冠体育app.

Its Anzhen and Wangjing stores are both located in densely populated areas and their combined business area is up to 130,000 square metres.

Anzhen has been performing well in consecutive years and Wangjing is expected to commence business by end of this year.

"This partnership provides us with a head start in the retail business in Beijing and North 皇冠体育app, and the outlook for our co-operation is rather positive," said Liew Mun Leong, president of CapitaLand Group.

Echoing Leong's remark, Ji Xiao'an, chairman of Beijing Hualian, indicated that his company had performed strongly and successfully in northern 皇冠体育app and had aggressive expansion plans.

"CapitaLand provides an international dimension in retail property management for us, which may bring strong synergistic value to the joint venture," said Ji.

Fan Yanru, deputy secretary- general of the retail enterprise's committee of 皇冠体育app Commerce Association for General Merchandise, told 皇冠体育app Daily that the co-operation might be regarded as a win-win strategy, considering the widely recognized brand of Hualian on the Chinese mainland and CapitaLand's rich experience in retail property management.

Earlier, CapitaLand entered into a co-operative contract with State-owned Shenzhen International Trust & Investment Co Ltd (SZTIC) to acquire and manage a series of shopping malls anchored by Wal-Mart, the world top retailer.

The total assets value of the two Hualian outlets and the six property jointly invested in with SZTIC will amount to over 3.689 billion yuan (US$444.45 million).

"The two acquisitions, and more acquisitions in the pipeline we are pursuing will expedite our plans to establish a 皇冠体育app retail property fund," said Leong.

The Anzhen store is currently generating a property yield of 8 per cent. For its Wangjing store, Beijing Hualian has guaranteed a minimum net property yield of at least 8 per cent.

"They both provide the necessary returns and match the investment profile required for the proposed 皇冠体育app retail property fund," said Leong.

Over the past few years, CapitaLand has been active in the property fund business. With the joint venture with Beijing Hualian, the group is well on its way to more than doubling its assets under management to 65.79 billion yuan (US$7.93 billion) in the next three years, up from the current 30.46 billion yuan (US$3.67 billion).

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