New CapitaLand JV to take over Rock Square

Guangzhou’s Rock Square shopping mall is being taken over by a JV formed by Singapore real-estate giant CapitaLand and CapitaLand Retail China Trust (CRCT).

CRCT is the majority shareholder in the new entity with a 51 per cent stake while CapitaLand owns the balance.

Rock Square, in Haizhu district, is CapitaLand’s second mall and CRCT’s first in Guangzhou, the provincial capital of the Guangdong province in South China and one of four first-tier cities in China.

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The deal is worth about RMB3.3 billion (US$500 million). The transaction is expected to be completed early next year.

Rock Square is one of the largest malls in Haizhu with a gross floor area (GFA), excluding car parking, of about 83,590sqm. Surrounded by residential estates, the mall caters to about 800,000 residents within a 3km radius. It is directly connected to Shayuan metro station, with planned line extensions by 2019 expected to increase the mall’s population catchment.

CapitaLand Mall Asia CEO Jason Leow says China is an important core market. “We continue to invest in our China shopping-mall business under our ‘core city clusters, dominant assets’ strategy, which focuses on strengthening our presence in five city clusters with quality assets that command a dominant market position.

“Rare opportunity”

“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.”

When completed, the acquisition will boost CapitaLand’s retail presence in Guangzhou, where it already owns and manages CapitaMall Sky+, which opened in 2015.

CapitaLand Retail China Trust CEO Tan Tze Wooi says the acquisition marks CRCT’s strategic entry into another first-tier city after Beijing and Shanghai. “It represents a progression of our portfolio reconstitution strategy, whereby capital from the sale of CapitaMall Anzhen is recycled into a multi-tenanted mall with a longer balance tenure and stronger growth potential.”

He says the acquisition will be timely as more than half of the mall’s leases come up for renewal between next year and 2020. “This presents us with a window of opportunity to achieve rental uplift through tenant-mix adjustments, unit reconfiguration and layout improvements.”

Opened in 2013, Rock Square is a five-storey mall with three levels above ground. It offers a range of fashion, F&B, children-oriented and entertainment options, and has such international brands as Aeon, Uniqlo, Victoria’s Secret and Zara. At the end of June, the mall was 96.4 per cent committed.


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