Raffles City to expand with acquisition of twin towers
CapitaLand, one of Asia’s largest real estate developers, owners and operators, announced today that it has acquired Shanghai’s tallest twin towers, in conjunction with Singapore’s sovereign wealth fund GIC, for 12.8 billion yuan (US$1.84 billion) as the company continues to expand its signature Raffles portfolio in China.
To facilitate the acquisition, CapitaLand has formed a 50/50 joint venture with GIC through Raffles City China Investment Partners III, which it owns a 41.7 percent stake in, with the remaining held by investors from Asia, North America and the Middle East.
Located in the city’s North Bund in Hongkou District and comprising two 50-storey, 263-meter premium Grade A office towers linked at the base by a seven-storey shopping mall.
The 312,717-square-meter project, scheduled to open in phases from the second half of 2019, will become the third Raffles City integrated development in Shanghai, or the ninth in China and the 10th globally.
“CapitaLand remains the foreign developer with the largest portfolio under management in Shanghai, a strong market with the depth to support our third Raffles City integrated development,” said Lee Chee Koon, president and group CEO of CapitaLand. “In line with our long-term belief in China, we will stay invested through market cycles to reap the compounding effects of our investments.”
The acquisition of the Raffles City in North Bund, or the second asset to be injected into RCCIP III, is in line with CapitaLand’s strategy of growing its portfolio by leveraging its fund management capability, the company said.
Shanghai is one of the five core city clusters under the Singaporean company’s China strategy, which consists of Beijing/Tianjin, Shanghai/Hangzhou/Suzhou/Ningbo, Guangzhou/Shenzhen, Chengdu/Chongqing/Xi’an, and Wuhan.
Including this latest acquisition, CapitaLand now owns and manages 20 commercial properties in Shanghai that span over 1.8 million square meters in gross floor area, of which eight are integrated developments with office and retail components.
In China this year, CapitaLand has to-date divested close to S$2 billion (US$1.45 billion) worth of non-core assets as it continues to optimize its China portfolio.