CapitaLand divest partial stake in Raffles City to Ping An Insurance

The divestment deal amounts to CN¥46.7b.

Singapore real estate giant CapitaLand will divest partial stakes in a group of companies that own six of its Raffles City developments in China to Ping An Life Insurance Company for CN¥46.7b ($9.6b).

The portfolio comprises Raffles City Shanghai, Raffles City Beijing, Raffles City Ningbo, Raffles City Chengdu, Raffles City Changning (Shanghai) and Raffles City Hangzhou.

After the divestment, CapitaLand will retain an effective stake of 12.6% to 30% in each development. Under its signature “Raffles City” trademarks, CapitaLand will also continue to provide asset management services for these developments and earn fee income. 

“CapitaLand holds a long-term view of its business in China and is seeing more opportunities to work with domestic capital partners in the real estate space,” CapitaLand said.

The deal is expected to be completed by Q3 2021 with an expected net proceeds of $2b.

“Part of the unlocked capital will be used to support the Group’s investment pivot to new economy assets such as business parks, logistics and data centres, forming a new pipeline for future recycling. CapitaLand plans to grow our China exposure in this sector to $5b over the next few years, from the $1.5b as at the end 2020. The investment focus covers business parks, logistics and data centres, where tenants typically hail from new economy sectors that enjoy robust fundamentals and a supportive regulatory environment,” said Puah Tze Shyang, chief executive officer of Investment and Portfolio Management at CapitaLand China.