CapitaLand to Continue to Seek China Opportunities Amid Government Curbs
CapitaLand Ltd. (CAPL), Southeast Asia’s biggest developer, said it will continue to seek opportunities in China as the nation becomes more “attractive” amid government curbs aimed at cooling the property market.
CapitaLand, with S$10.1 billion ($7.8 billion) of assets in China, will maintain a balance between commercial and residential projects in China, Chief Operating Officer Lim Ming Yan told reporters in Shanghai yesterday. It needs residential developments for liquidity and commercial investment properties for longer-term holdings, Lim said.
“We are always looking for good investment opportunities, whether it’s good times or bad times. In the current market situation, we will continue to be on the lookout for good opportunities,” Lim said. “It’s getting more attractive.”
CapitaLand joins Cheung Kong Holdings Ltd., the developer controlled by Hong Kong billionaire Li Ka-shing, who said it is a “golden time” for the company to invest in China. The government this year expanded efforts to curb the risk of an asset bubble by raising down payment and mortgage requirements and imposing home purchase restrictions in about 40 cities.
“A lot of these developers see China as a long-term, not a short-term play,” said James MacDonald, head of China research for Savills Property Services (Shanghai) Co. “If you have got the money, you want to buy when the market is coming down so that you can really capitalize on it upon recovery two or three years down the line.”
China will achieve a “softer landing” as home prices will be stabilized, and China’s government is unlikely to loosen curbs on the residential property market before the first half of next year, Lim said. 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.
There won’t be major corrections in China’s biggest cities, according to Lim, even if some newly launched projects will have some price adjustments.
The Singapore-based developer’s third-quarter profit dropped 83 percent after lower contributions from China and Australia. 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.
--Bonnie Cao. Editors: Malcolm Scott, Jim McDonald
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