CapitaLand to buy Galleria mall Chengdu

CapitaLand Retail China Trust (CRCT) is buying a Galleria mall Chengdu for RMB1.5 billion (US$225.7 million).

Its trustee, HSBC Institutional Trust Services (Singapore), has signed the sale-and-purchase agreement to acquire Galleria Chengdu, in the Xinnan Tiandi retail precinct of the Gaoxin District. It will be CRCT’s 11th mall and its first in Chengdu, the provincial capital of Sichuan.

The mall was valued at RMB1520 million last month by Savills Valuation & Professional Services. The total investment cost for the mall is expected to be about RMB1.527 billion.

When completed, the purchase will enlarge CRCT’s portfolio size by about 14 per cent to RMB12.547 billion.

“With the opportunity to tap on CapitaLand’s network of five malls in Chengdu, the proposed acquisition is aligned with CRCT’s investment strategy to expand its footprint by leveraging on our sponsor’s strong presence in key Chinese cities where it has a competitive edge,” says CEO Tony Tan of CapitaLand Retail China Trust Management (CRCTML), the manager of CRCT.

He says the mall has an existing tenant profile that includes international brands, giving CRCT a strong base for further enhancement.

About two-thirds of the mall’s leases are up for renewal by 2018, which Tan says presents an opportunity to uplift the rental income through tenant mix adjustments.

Opened in 2010, the mall has a retail area of about 53,619 sqm, and there are 900 car-park spaces. The six-storey mall houses such brands such as Golden Harvest Cinema, H&M, Innisfree, Nike, Starbucks, Swarovski and Uniqlo.

The Gaoxin district is a high-tech zone and home to about 100 Fortune 500 companies, including Amazon, General Electric, IBM, Intel4 and Microsoft.

“As the capital of Sichuan province with a population of about 15 million people, Chengdu is the economic engine and transportation hub of western China,” says Tan. “The city’s annual GDP last year grew 7.9 per cent, outpacing the national average of 6.9 per cent. In the same period, the city’s per-capita urban disposable income rose 8 per cent and retail sales grew even faster – at 10.7 per cent.”

Galleria mall Chengdu 1

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