Singaporean developer CapitaLand is ramping up its presence in the western Chinese municipality of Chongqing, buying a RMB 5.7 billion ($864 million) mixed-use site that will be turned into a retail, office and residential property yielding over 2,100 homes.
The 32-hectare (nearly 322,00 square metre) parcel is located in the mega-city’s Liangjiang New Area, a national-level development zone north of downtown. A subsidiary of CapitaLand Limited bought up Chongqing Zhonghua Real Estate Co, which owns the collection of greenfield and brownfield sites, for a cash consideration of RMB 2.2 billion ($334 million), reflecting the RMB 5.7 billion agreed value of the site.
The new project will double CapitaLand’s retail footprint in Chongqing, where the developer is currently developing its $3.8 billion Raffles City Chongqing project in the city’s downtown business district.
CapitaLand Bets on Western Chinese Boomtown
The newly acquired sites are located in Xinpaifang, a developed residential and commercial area at the border of the Yubei and Jianbei districts within Liangjiang New Area. The overall site comprises two two greenfield parcels that will yield 1,900 housing units and a 335,000 square metre shopping mall to be constructed by 2022. CapitaLand’s newest asset also includes brownfield sites with completed or soon-to-be-completed properties featuring 223 residential units and 10,000 square meters of office and retail space.
The announcement by the Singapore-listed developer does not reveal the identity of the seller of the project, beyond stating that it is “a party unrelated to CapitaLand.”
“Given its significant scale, strategic location and excellent connectivity, the land parcel in Chongqing’s Xinpaifang is a prized acquisition that will boost CapitaLand’s land bank in a key gateway city in the South Western region of China,” commented Lim Ming Yan, CapitaLand’s president and group CEO in a statement.
Singapore-listed CapitaLand, which owns and manages a global portfolio worth more than S$91 billion ($66.7 billion), is betting on demand for apartments in a high-income community of Chongqing, China’s fastest-growing major city. About 600,000 people live within a three-kilometre radius of the company’s latest acquisition.
The project is also located within the Chongqing Pilot Free Trade zone, an economic development zone approved by China’s State Council just last year. The sprawling Chongqing municipality, home to over 30 million people, recorded GDP growth of 9.3 percent in 2017, outstripping the national average of 6.9 percent.
Developer Doubles Retail Portfolio in Chongqing
“This acquisition is also timely, and we expect to recognise gains from sales of the soon-to-be-completed residential units upon handover, which could be as early as the second half of this year,” commented Lucas Loh, CEO of CapitaLand China.
“This latest acquisition rides on the strong sales momentum for the residential component of Raffles City Chongqing – CapitaLand’s largest and most complex integrated development opening in phases from next year – which has sold 90% of the 500 apartments launched to date,” Lim added.
The new project’s retail offering also aims to complement CapitaLand’s 230,000 square metre shopping mall under development in Raffles City Chongqing, a 1.12 million square metre mixed-use complex in the Chaotianmen riverfront area.
The massive integrated development which broke ground in 2012 will also feature 1,400 apartments along with service residence, office and hotel space. Developed by a joint venture of CapitaLand and Ascendas-Singbridge, the Raffles City project is said to be the largest single investment by a Singaporean firm in China. Five towers of the landmark project have already topped out.
CapitaLand also has upcoming serviced residence projects in Chongqing under its Ascott and Citadines brands.