CapitaLand Ltd., Southeast Asia’s biggest developer, and its partners have agreed to buy a development site in China’s Western Chongqing city for 6.54 billion yuan ($1.02 billion).
The project will include a shopping mall with a gross floor area of 220,000 square meters (2.4 million square feet), 331,000 square meters of residential space and 174,000 square meters of offices, the company said in an e-mailed statement today. CapitaLand and CapitaMalls Asia Ltd., its retail property unit, will each own 25 percent of the project, while Singbridge Holdings Pte and other partners will hold the rest, it said.
CapitaLand, with S$10.1 billion ($7.8 billion) of assets in China, will continue to seek opportunities in the country even as the government intensified measures to curb the risk of an asset bubble, Chief Operating Officer Lim Ming Yan said Nov. 20. The government this year raised mortgage requirements and imposed home purchase restrictions in about 40 cities.
The project, located in the Yuzhong district, is expected to cost a total of 21.1 billion yuan, according to the statement. It will be CapitaLand’s third shopping mall in the city, adding to its 40 retail properties in China, with another 16 under construction.
CapitaLand shares fell 1.6 percent to S$2.49 at the close in Singapore, while CapitaMalls dropped 0.4 percent to S$1.27.
China’s home prices last month posted the worst performance this year, with 33 out of 70 cities that the government monitored falling from the previous month.
The Singapore-based developer’s third-quarter profit dropped 83 percent after lower contributions from China and Australia and an accounting rule change that restated last year’s revenue. CapitaLand will aim to double its portfolio in China in the next five years as it expects the economy to expand over the next decade, Lim said in an interview in June.