CapitaLand banks on integrated property developments in China

CapitaMall Westgate in Wuhan, China. The complex is one of four integrated developments opened in April by CapitaLand. The property developer has the largest portfolio of integrated developments of any foreign developer in China, it said in a Singapo
CapitaMall Westgate in Wuhan, China. The complex is one of four integrated developments opened in April by CapitaLand. The property developer has the largest portfolio of integrated developments of any foreign developer in China, it said in a Singapore Exchange filing yesterday.PHOTO: CAPITALAND

SINGAPORE - CapitaLand is banking on integrated developments to get ahead in China's intensely competitive retail and real estate scene.

It is already the foreign developer with the largest portfolio of integrated developments in China, said the Singapore-based property developer in a Singapore Exchange filing.

This portfolio comprises 23 integrated developments, which make up over 6.2 million square metres of gross floor area across China.

Its integrated developments typically comprise a mix of retail, commercial or residential components.

More than one million square metres of its portfolio was accounted for by four recently-opened integrated developments: Raffles City Shenzhen, Raffles City Changning in Shanghai, Raffles City Hangzhou and CapitaMall Westgate in Wuhan.

Despite the popularity of online shopping, a glut of malls and an economic slowdown in the world's second largest economy, the mainboard-listed property developer remains bullish on its China play.

"China is an important core market for CapitaLand, accounting for 44 per cent of the group's total assets," said CapitaLand president and group chief executive Lim Ming Yan.

Furthermore, the assets are not fully realised, added Mr Lim, noting that of the 6.2 million of gross floor area owns and manages by CapitaLand in China, more than half is still under development, including mega-project Raffles City Chongqing.

"As more of these integrated developments open and turn fully operational, it will position CapitaLand well to expand our recurring income base to deliver sustainable returns with positive effect on our return on equity," he said.

One of its most recently-opened integrated developments in China is CapitaMall Westgate in Wuhan. The 246,434 sqm complex houses a shopping mall, an ice-skating rink, two office towers and a 399-unit residential tower.

When the mall had its soft opening in April to coincide with China's long Labour Day weekend, it attracted about 500,000 shoppers over a three-day period.

The mall has achieved more than 90 per cent committed occupancy rate, while the residential tower, which was launched for sale in December last year, has sold more than half of its 399 units.

The group also held the soft openings of three other malls in Shenzhen, Shanghai and Hangzhou in late April, in time for the Labour Day holiday.

"These four projects represent a new generation of CapitaLand integrated developments that are larger in size and incorporate richer offerings," said CapitaLand China chief executive Lucas Loh.

"Response from retailers to these projects has been very positive - the shopping malls in the three Raffles City developments achieved 95 per cent in committed occupancy and more than 20 per cent of the space is leased to new-to-market flagship and concept stores," he added.

The next exciting project for the group is Raffles City Chongqing - its biggest single investment in China and the largest ever single investment in China made by a Singaporean company.

The project, which is expected to cost 24 billion yuan (S$4.88 billion), is on track to open in the second half of next year.