25 years on, and CapitaLand still going strong in China
CapitaLand, Asia’s leading real estate owner and investor, is celebrating its 25th anniversary of operation in China this year. In Shanghai, where the Singapore-based company kickstarted its China business in 1994, CapitaLand on Friday unveiled its 10th Raffles City development globally — and its third in this city — and announced that it has agreed to divest its interest in companies that hold the Innov Center in Yangpu District to CapitaLand Asia Partners I.
Officially launching Raffles City The Bund, CapitaLand China’s Lucas Loh, president and chief executive officer of China, outlined the company’s rapid development in China over the past quarter of a century, its growth strategies for the future, the impact of CapitaLand’s recent acquisition of developer Ascendas-Singbridge on the China business, as well as how the company will embrace innovation to further sharpen its competitive edge and consolidate its leadership in the Chinese market.
Here, he talks with Shanghai Daily:
Q: How do you view your development here and where does China fit into your global operation?
A: As one of the earliest foreign real estate developers to tap into the China market, CapitaLand has been expanding its China presence over the past 25 years by riding upon opportunities brought by the country’s reform and opening-up policies as well as the large-scale and fast urbanization process.
China is CapitaLand’s largest overseas market, where it owns and manages more than 190 projects in 41 cities. As of March 31, the group manages a global portfolio worth about 520 billion yuan (US$75 billion) — 49 percent of that in China. CapitaLand owns assets valued at over 120 billion yuan in China, accounting for 37 percent of the group’s total.
Q: How will your latest acquisition of Ascendas-Singbridge impact your business in China and how will you leverage ASB’s expertise in providing business space solutions to consolidate your strength in the domestic real estate market?
A: As CapitaLand continues its leadership in the residential, retail and lodging sectors, the combined platforms of the two companies will give us capabilities across the commercial/business space value chain, while providing a strong foothold in logistics and business parks.
Our fund management business will also be strengthened by the expanded platform, offering both breadth and depth of asset classes.
ASB has established a strong track record of more than 20 years in China.
Its footprint has expanded to 11 key cities, with projects covering integrated urban developments, business and IT parks and office buildings.
With the added development expertise and opportunities in the urban development, business park and industrial sectors from the assimilation of ASB’s business, the enlarged CapitaLand portfolio will sharpen our competitive advantage across our five core city clusters in China.
When this deal goes through, which is slated around early July, the group will see its AUM (assets under management) in China increase 6 percent, total operational area will grow 32 percent and its land reserve jump 36 percent.
Q: What is your future expansion plan for China and what will be your major growth engines over the next couple of years?
A: We will continue to deepen our presence in the five core city clusters and remain a net buyer in China, sticking to active and disciplined asset recycling as an important part of our strategy to enhance returns and to rejuvenate and rebalance our portfolio. Leveraging our end-to-end value chain offerings, ranging from investment and fund management to development and operations, we look forward to enhancing CapitaLand’s real estate ecosystem with our partners to meet the changing needs of Chinese consumers as China enters new stages of urbanization and urban renewal. In particular, we will seek further growth in China with digital innovation being a core impetus, exploring new business models and sharpening our competitive edges in the digital era.
Q: What is CapitaLand’s approach to embracing innovation to strengthen its leadership in the market as a developer and investor?
A: We’ve identified four major fields where innovation can positively affect our business. First of all, from the perspective of products which mainly cover residential, office and retail properties, we will focus on smart buildings to better meet our customers’ ever-changing needs. Secondly, in terms of business models, we have already launched a forward-thinking “Next-Ten” concept store in Beijing this year in one of our latest endeavors to embrace challenges of the digitalization era. Through big data analysis and intellectual software and hardware platforms, retailers are able to do targeted sales and marketing and have a better online and offline interaction with their customers.
Thirdly, from the angle of corporate management, we will work out new initiatives and incentives to encourage innovative thinking among our employees.
And last but not the least, we would like to seek opportunities to work with our real estate counterparts with complementary advantages as well as to look for cross-industry cooperation opportunities for further business growth.
Q: As the foreign developer with the largest commercial portfolio under management in Shanghai, CapitaLand is set to open its third Raffles City integrated development in the city in phases from the second half of this year. What are the major highlights of the project?
A: Located in the heart of Shanghai’s North Bund area, Raffles City The Bund boasts the tallest twin towers in Shanghai. Standing at 263 meters, the towers offer stunning 270-degree panoramic views of the Shanghai Bund and Lujiazui CBD on both sides of the Huangpu River. With a total gross floor area of 312,717 square metres, the project comprises two 50-story premium Grade A office towers linked at the base by a seven-story shopping mall. The office component will be ready for occupation from the second half of 2019, while the retail component is slated to open in 2020.