Linked units of CapitaLand have gained full control of China’s 22 Wal-Mart anchored malls under the deal of asset swap.
The agreement on asset swap is between CapitaRetail China Development Fund II and CapitaRetail China Development Fund, and the SZITIC Commercial Property Co (SCP) in China and Singapore property giant, the two sponsored funds.
Already possessing 65 percent of 16 retail projects, the two development funds, have taken full ownership by taking more than 35 percent share of SCP. They have also taken over 49 percent interest of SCP in another six projects. Of the six projects, CapitaRetail China Trust (CRCT) controls an existing 51 percent share in one project and CapitaRetail China holds an existing 51 percent share in the remaining five projects.
The two funds, in return, offered to SCP their half-interest in Xiangmihu Mall in Shenzhen as well as their 65 percent share in four of their retail projects.
Also involved in the arrangement are the SCP and the development funds, divesting their respective 35 percent and 65 percent equity shares in six parcel of land for which no significant development effort has initiated. As the parties move in various strategic directions, the cooperative agreement in cooperation with the SCP will be terminated.
According to CapitaLand, full control of management and ownership of the 22 retail malls in China would help further drive its growth and guarantee a better integration of investment in China and retail operations of CapitaLand.
After the swap of shares, the retail portfolio of CapitaLand in China will compose 46 malls – of which 30 are in operation – across 32 cities with 28.9 billion yuan (S$6.2) billion total asset value.
With institutional investors owning a balance, 45 percent interest in the development funds are indirectly owned by CapitaLand.