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CapitaLand has teamed up with Singapore’s sovereign wealth fund GIC to buy Shanghai’s tallest twin towers for about S$2.54 billion (¥12.8 billion).
The acquisition will be made through CapitaLand’s investment fund Raffles City China Investment Partners III (RCCIP III). The deal will be a 50:50 joint venture between GIC and CapitaLand’s fund.
The asset is currently under development in Hongkou District, Shanghai, China and will be the third of CapitaLand’s ‘Raffles City’ integrated development in Shanghai.
“The acquisition is in line with the group’s strategy of growing its portfolio by leveraging its fund management capability,” said CapitaLand. The group holds a 41.7% stake in the RCCIP III fund. Other remaining interests in the fund are held by investors from Asia, North America, and the Middle East.
The integrated development sits on a 4.05-hectare site space along Huangpu River in North Bund. It has a total gross floor area of 312,717 square metres. The site comprises of two 50-storey premium Grade A office towers linked at the base by a seven-storey shopping mall and is connected to major metro lines.
The development is expected to open in phases from the second half of next year.
CapitaLand’s Group CEO and President Lee Chee Koon commented: “CapitaLand is proud to work with a strong partner like GIC on this project, along with our partners in RCCIP III. Importantly, this prime asset will begin operations in phases from the second half of 2019, giving us speed to market in the competitive Shanghai market, which continues to power ahead.”
Mr Lee claimed that the group is the foreign developer with the largest portfolio under management in Shanghai. The group has a long-term view on China and will stay invested through market cycles to reap the compounding effects on its investments, Mr Lee added.
Following the pre-market announcement on the tie-up, CapitaLand shares opened lower on Tuesday, down 0.65% or S$0.02 at S$3.09.
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