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Property

Singapore's CapitaLand cashes in China stakes to fund new bets

Ping An agrees to buy shares in Raffles City commercial projects under $7bn deal

A Raffles City development in Shanghai: CapitaLand plans to shift its Chinese portfolio away from commercial sites toward logistics and other growth sectors. (Photo courtesy of CapitaLand)

SINGAPORE -- Top Singaporean real estate group CapitaLand has agreed to sell stakes in six Chinese commercial properties to China's Ping An Life Insurance in a deal valued at 46.7 billion yuan ($7.23 billion).

CapitaLand will unload part of its ownership of two Raffles City projects in Shanghai and one each in Beijing, Ningbo, Chengdu and Hangzhou.

China is CapitaLand's largest market. The company plans to shift its Chinese portfolio away from housing and commercial real estate toward sectors such as industrial parks, logistics and data centers.

The six complexes cover a total area of 1.5 million sq. meters and include malls, office buildings and serviced apartments. The developer will still operate the malls and other facilities, under the deal announced Monday.

CapitaLand's stakes in the properties will decline to between 12.6% and 30%, from levels spanning 30.7% to 55%. Ping An also will buy shares from other investors in the projects and acquire controlling stakes in the locations each ranging from 60% to 70%.

When the transaction closes in the next quarter, CapitaLand expects to reap net proceeds topping 2 billion Singapore dollars ($1.48 billion). The company will invest that money in Chinese growth sectors such as logistics.

CapitaLand aims to lift investment in growth sectors to SG$5 billion over the next few years from SG$1.5 billion at the end of 2020. But the company also will proceed with a strategy to boost fee income and improve business efficiency.

This year, CapitaLand will split into two companies: a property development business that will be taken private and a newly listed real estate management company. The company appears to be shaking up its assets to boost shareholder value.

On Thursday, a Chinese CapitaLand subsidiary acquired a license to operate as a private equity fund manager.

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