Workers install signage on a CapitaLand building. The property company currently has $38.4 billion in assets under management, and 36 percent of that figure is in China. [Photo / Provided to China Daily]
Singapore developer plans to build 47 malls in five years across 34 cities
TIANJIN - The Singapore-based property developer CapitaLand Ltd will double its investment in China's commercial real estate and serviced apartments sectors within three to five years, despite the government's rigorous measures to cool the property market.
"We will increase our malls to 100 within five years, from the existing 53 across 34 cities," said Lock Waihan, deputy chief executive officer (CEO) of CapitaMalls Asia (China), a member of CapitaLand China.
As one of the largest property developers in Singapore, CapitaLand currently has 250 billion yuan ($38.4 billion) in assets under management, 36 percent of that figure is in China.
"We may increase China's proportion to around 45 percent in the future, but we will keep it under 50 percent, ensuring a balance among our three major markets: Australia, Singapore and China," said Lim Mingyan, chief operating officer of CapitaLand Ltd, and CEO of The Ascott Ltd, a CapitaLand subsidiary.
While strengthening exploration in the commercial property sector, the company will also boost its presence in the serviced apartment sector through Ascott.
"We plan to double the number of serviced apartments from 6,000 to 12,000 within three to five years," said Lim, adding that China will be Ascott's fastest-growing market.
Ascott now has three product lines in the country - Ascott, Somerset and Citadines - targeting different groups of customers.
"We'll serve more domestic clients along with rapid business expansion of private enterprises at home," said Lim.
In 2010, China was the biggest contributor to CapitaLand's pretax profit, as its unit CapitaLand China Holdings reported a 240-percent surge in pre-tax earnings to $532.6 million. The company sold property worth $858.6 million in China last year.
Though the Chinese government has rolled out a slew of measures to curb surging price increases in the residential sector, Lim said the company will not change its business strategy in the market.
"I believe the situation will be clearer in the second half of the year, and more merger and acquisition opportunities will also arise in the coming six months," Lim said.
In January 2010, CapitaLand acquired a 100 percent stake in Orient Overseas Developments Ltd for $2.2 billion, doubling its property portfolio in China from 1.4 million square meters (sq m) to 2.8 million sq m.
"The sales of the seven projects we took over from Orient Overseas Developments are better than expected," said Lim. Among those seven projects, five are in Shanghai, one is in Tianjin and the other is in Kunshan.
Although Chinese lenders have largely tightened loans to property developers, Lim said the company's business expansion in the country is unlikely to be affected because the net debt-to-equity ratio is only 0.18 percent.
In China, CapitaLand's business mainly involves residential (40 percent to 45 percent), commercial (40 percent to 45 percent) and serviced apartments (10 percent). "The business portfolio will remain stable despite tightening measures in the residential sector," said Lim.
