The Singapore property developer aims to grow its exposure to high-growth sectors in China by investing in business parks, logistics and data centers.

CapitaLand aims to redeploy part of the capital from asset recycling to new economy assets, growing its China exposure in this sector to S$5 billion over the next few years, from the current S$1.5 billion, it announced in a statement on Tuesday.

This is part of the firm's plan to ride China’s economic transformation by focusing on technology, services and domestic consumption. CapitaLand Retail China Trust (CRCT), the group’s dedicated real estate investment trust (Reit) platform for non-lodging assets in China, has a target portfolio mix of 40 percent in integrated developments, 30 percent in retail and 30 percent in new economy. It will also continue to explore opportunities from third parties and acquire from the market, the announcement said.

In line with its targets, CapitaLand will divest its interest in five business park properties and Rock Square mall in China, and will enter into a 49:51 joint venture with CRCT in Ascendas Xinsu, which comprises six locations with 61 buildings, including business parks and industrial assets, at an agreed property value of RMB 2,265 million ($345 million) on a 100 percent basis. The divestment is expected to be completed in the first quarter of 2021, and CapitaLand is expected to receive proceeds of about $403 million, with an estimated gain of  $26.5 million.

China Opportunity

CapitaLand said it was keen to broaden its exposure to new economy assets, even before the pandemic, to create a balanced and diversified portfolio across asset classes and geographies. 

«This conviction has been reinforced by COVID-19, during which we witnessed the relative resilience of new economy tenants who have been better able to withstand cyclical headwinds. In China, we continue to see many compelling opportunities in the new economy sector, whose prospects have been boosted by favorable government policies and robust demand,» Lucas Loh, president, China, CapitaLand Group, said in the announcement.

According to its website, CapitaLand owns and manages a global portfolio of S$133.3 billion ($99.13 billion), which includes properties in 220 cities in over 30 countries, as of 30 September 2020.