CapitaLand, together with CapitaMalls Asia (CMA) and three other partners, will develop an integrated mixed-use property in Shanghai under the Raffles City brand at a development cost of about 8.1 billion yuan.
CapitaLand expects to record a net gain of about $132 million through a series of stake sales in the development.
Raffles City Changning, which lies in the Changning district close to Hongqiao Transportation Hub, will comprise Grade A office tower units, residential units, and a shopping mall.
The site has a maximum gross floor area (GFA) of 237,327 sq m and a leasehold period of 50 years that runs until 2055.
With an appraised value of 5.34 billion yuan, the site is one of the seven plots that went to CapitaLand when it acquired Orient Overseas Developments Limited in February.
The property will be the second Raffles City development in Shanghai and the seventh in China. It is expected to be completed in stages from 2014.
An unidentified Chinese state-owned enterprise owns a 5 percent stake in the project, while CapitaLand China Holdings, a wholly owned subsidiary of CapitaLand, initially owned the other 95 percent through an entity, Senning Property.
CapitaLand China is keeping a 27 percent stake in Senning and disposing of the other 73 percent to CMA, an Asian institutional investor and a North American pension fund for $759 million.
CMA – a 65.5 percent owned subsidiary of CapitaLand – will pay $187.2 million for an 18 percent interest in Senning. The pension fund and institutional investor will have a 55 percent stake in Senning.
After the transactions, CapitaLand’s effective stake in Raffles City Changning will be 36.85 percent.