CapitaLand charts new direction in China

PHOTO: CapitaLand charts new direction in China

LOCAL property giant CapitaLand will be focusing more on developing mixed developments and planning townships in China, a shift from its traditional business of building homes.

This marks a new direction for the firm, which has developed residential projects in first-tier cities such as Shanghai, Beijing and Guangzhou since entering the Chinese market more than 10 years ago.

Change is afoot as China's rapid urbanisation has created opportunities for the firm to become a major player in building mixed developments, said chief executive Lim Ming Yan.

"Increasingly, we see opportunities in the form of integrated developments," added Mr Lim, who was speaking to reporters and analysts this week, after a tour of the firm's projects in China.

Mr Lim was speaking on the firm's progress and plans since it was restructured in January. He was joined by other unit heads.

"The density of cities is very high (in China) as opposed to the United States or Australia. Because of that, the government has put in a lot of transportation infrastructure in the form of MRT stations and subways.

"When they start doing that, the logical way to have a comfortable built environment within a high-density city is to have integrated developments."

CapitaLand has secured prime sites connected to subway lines that are being built up throughout the country.

The 24,427 sq m Han Zhong Lu site in Shanghai, for example, was bought from local metro company Shentong Assets this year.

CapitaLand will build a mixed development on top of a subway interchange serving three metro lines.

CapitaLand is no stranger to mixed developments, having built four integrated Raffles City projects, in Shanghai, Beijing, Chengdu and Ningbo.

The Raffles City integrated projects in Shenzhen, Hangzhou and Changning should be completed by 2016, spanning a total gross floor area of about 1.5 million sq m, said CapitaLand China chief executive Jason Leow.

By 2018, the firm will have eight such projects with the completion of the 817,000 sq m Raffles City Chongqing - the biggest integrated project it has ever built.

This will bring the gross floor area of CapitaLand's Chinese integrated developments to 2.2 million sq m, with a total value of 62 billion yuan (S$13 billion).

CapitaLand has also had an urban planning project under way since 2009. It is assisting the Liwan district government in planning the 3.55 sq km Datansha island in the western part of downtown Guangzhou.

The project - the firm's first ever in urban renewal - will be developed over the next eight to 10 years, said CapitaLand China deputy chief executive Lucas Loh.

In exchange for cooperating with the government, CapitaLand hopes to obtain about 1.5 million sq m of land to develop residential projects and another 500,000 sq m for commercial developments.

"The Guangzhou mayor was recently in Singapore. He said that hopefully in the future, whoever wants to know what Singapore looks likedoesn't need to go to Singapore and can see a bit of it in Datansha," said Mr Loh.

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