
Jason Leow, CEO of CapitaLand Mall Asia
Singapore’s top developer continues to ramp up its retail presence in China, with CapitaLand Mall Asia and CapitaLand Retail China Trust (CRCT) partnering to buy a shopping mall in Guangzhou for RMB 3.36 billion ($511 million).
CRCT is taking a 51 percent share in the special purpose vehicle that owns Rock Square, a 899,766 square foot (83,591 square metre) mall in the southern Chinese mega-city, while CapitaLand’s retail division holds the remaining 49 percent, the group announced.
The seller is US investment manager PGIM, which purchased the then-unfinished project in the second quarter of 2012 for a reported RMB 2 billion, when the company was still known as Pramerica. The mall opened in the second quarter of 2013, and design firm Arcadis took on a project to reposition the property in 2014.
CapitaLand Doubles Down on Guangzhou
Rock Square has three stories above ground and two basement levels, and is located at 106-108 Gongye Avenue North in Guangzhou’s second most populous urban district, Haizhu. The mall serves a catchment of around 800,000 residents within a three-kilometre radius, and is connected to the Shayuan metro station, which lies on two lines providing access to Guangzhou’s eastern and western areas and the neighbouring city of Foshan.
The acquisition marks CapitaLand’s second mall in Guangzhou, and CRCT’s first, boosting the Singapore-listed trust’s portfolio size by 28 percent. CRCT, which is managed by a subsidiary of CapitaLand Limited, already has a portfolio of ten income-producing malls in seven Chinese cities, including Beijing and Shanghai.
The retail property has a committed occupancy of 94.6 percent as of June, and houses international tenants including Aeon, Uniqlo, Zara and Victoria’s Secret.

Guangzhou’s Rock Square originally opened in 2013
“Given Rock Square’s significant scale and strategic location with excellent transport links, the acquisition presents a rare opportunity to increase our exposure to the high-growth retail market in a first-tier city,” commented Jason Leow, CEO of CapitaLand Mall Asia in a statement.
Leow also noted that the acquisition of the mall with upside potential would help CapitaLand to grow its recurring income base. Leases accounting for over half of the mall’s total rent are up for renewal between 2018 and 2020, creating potential for CapitaLand to elevate rents by adjusting the tenant mix and improving the layout and unit configuration.
That strategy appears to have worked for the Singapore-based group with a global real estate portfolio of more than S$85 billion. In an August article, DBS Group Research observed good performance throughout the shopping centre portfolio of CapitaLand Mall Asia, the company’s retail arm.
“Tenant sales in 1H17 is doing well in Singapore (+0.9%) and China (+16.8%), implying that the group’s strategy of rejigging its tenant mix and offerings at its malls is well received by consumers,” the bank noted.
CapitaLand already owns the 87,000 square metre CapitaMall SKY+ mall in Guangzhou, which opened in 2015.
CapitaLand and REIT Bet Big on China Malls
The Guangzhou acquisition is the latest in a flurry of mall moves by CapitaLand, which has opened eight new retail developments this year in China, Singapore and Malaysia, totalling one million square metres. Most recently, CapitaLand launched its largest-ever shopping centre by opening the 300,000 square metre Suzhou Center Mall in the eastern Chinese city of Suzhou in mid-November.
CRCT in August 2016 acquired the six-storey Galleria mall in Chengdu’s Xinnan Tiandi retail area from BlackRock for RMB 1.5 billion ($226 million). The trust has a total asset size of S$2.8 billion as of September.
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