CapitaLand turns to hot Chinese markets for much-needed growth

Residential, retail sales will be key drivers.

CapitaLand's residential and retail business in China is expected to drive the company's growth in coming quarters, according to a report by Barclays.

"We expect retail and residential sales in China to drive growth in FY15-17E, and for its integrated projects, mainly
the completion of Raffles City China in FY16 and FY18 to drive growth after that," said Barclays.

In particular, the group's residential business will benefit from aggressive Chinese easing measures, which have made mortgages more available.

"CAPL management expects residential sales to improve, following the PBOC’s latest easing measures which have lowered mortgage costs and increased mortgage availability, as well as the Chinese government’s relaxation of home purchase restrictions in second and third tier cities. We estimate China is c24% of its RNAV,” the report noted.