More than just believing in the recovery story of China, Liew Mun Leong, the chief executive at CapitaLand, also says that the growth strategy for CapitaLand is “emboldened by it”.
During the launch of the fifth Raffles City-brand project in China last Saturday, Liew said that CapitaLand’s plan is to raise its China operations’ input to the group’s assets from 26 percent to between 40 percent and 45 percent over the next few years. Also present during the launch was Prime Minister Lee Hsien Loong.
Liew also told correspondent from The Straits Times that the growth in China is at the forefront among the world’s economic powerhouse nations because of its quick and effective response to the financial crisis. Facing the worst worldwide economic decline in recent memory, China devised a $848 billion (4 trillion yuan) stimulus plan.
“Before China was really affected by the global crisis, it had already recovered,” Liew said.
Lim Ming Yan, the chief executive for CapitaLand China Holdings, believes that the Chinese market still has a lot more room to grow despite the crisis. “Retail sales in China are still growing. They grew 15 percent in the last quarter compared to the same period last year. People are still spending,” he said.
After Beijing, Shanghai, Hangzhou and Chengdu, Raffles City Ningbo is the fifth Raffles City-brand project of CapitaLand in China. The development will house a 30,000-square-metre Grade A office tower, a 20,000-square-metre tower for serviced apartments, and a 50,000-square-metre mall. After completion by 2012, it will have the same retail offerings like its counterparts in Shanghai and Beijing.
This past weekend, CapitaLand signed strategic collaboration contracts with the Industrial and Commercial Bank of China and the Bank of China. The agreements will grant CapitaLand’s China units a credit limit allocation that of as much as 25 billion yuan. “Projects in China are very huge, (around) S$800 million for one project,” said Liew.
“In any city, usually you build (the residents) homes first. Then you find them jobs and build them offices. Then when they make money you build them shopping malls,” he added.
In view of this, CapitaLand in China is always looking forward to buying distressed assets and develop them to become profitable, much as the group did with residential properties in Beijing in recent years.
While China continues to ride with the modern global economy, Liew said CapitaLand has a competitive advantage because “they’re still behind us in terms of finishes”.
He finished by adding: “Nothing will deter our (strategy) on China.”