CapitaLand to gain $85m with Innov Tower sale

The gains could be used to acquire the Guozheng Center.

CapitaLand is following an asset reconstitution in China with the recent divestment of Innov Tower and the planned investment in Guozheng Center.

According to DBS Group Research, the divestment of the Innov Tower could realise an $85m gain for the group, which could be used as it acquires the Guozheng Center.

"This is the hallmark of CapitaLand’s portfolio reconstitution strategy, realising value from more mature assets (Innov Tower) and redeploying proceeds to properties with further upside potential (Guozheng Center) when the property is fully leased and expect the group to lock in further with potential capital gain when prices stabilise in the medium term," it said, noting that this allows CapitaLand to optimise and enhance returns.

With this, the brokerage firm expects further momentum in terms of CapitaLand’s capital deployment in the key cities of China and Singapore, which it believes will provide fundamental support to the persistent buoyancy of the share price.