CapitaLand to sell three malls in China for $589.2m

The sale will generate proceeds of about $239.9m and a net gain of $37.6m.

CapitaLand’s subsidiary and associated companies have entered into an agreement with CapitaLand Retail China Trust (CRCT) to divest their interests in three companies that hold three malls in China, which include CapitaMall Xuefu and CapitaMall Aidemengdun in Harbin and CapitaMall Yuhuating in Changsha for $589.2m (RMB2.96b), an announcement revealed.

The agreed value was negotiated on a willing-buyer and willing-seller basis. The sale will generate proceeds of about $239.9m and a net gain of about $37.6m. The transaction, which is conditional upon CRCT unitholders’ approval, is expected to be completed in Q3 2019.

According to Lucas Loh, president & CEO of CapitaLand in China, the sale of CapitaMall Xuefu, CapitaMall Aidemengdun and CapitaMall Yuhuating to CRCT will allow the firm to realise their property investment value and unlock capital for reinvestment.

“Post divestment, we will continue to benefit from the malls’ strong and steady yields and participate in their future growth through CapitaLand’s stake in CRCT. The malls will also continue to be managed by CapitaLand. We remain confident in the retail prospects of Harbin and Changsha, which are fast-growing provincial capital cities with favourable long-term outlook,” he said.

In support of CRCT, CapitaLand has indicated its intention to take up its pro-rata entitlement, should relevant equity fund raising be included as part of the funding for CRCT to acquire the three companies. CapitaLand owns approximately 38.04% of CRCT’s units, including its indirect interests in CapitaLand Mall Trust, which owns about 12.29% in CRCT.  

Photo from CapitaLand.