Singapore’s CapitaLand has agreed to acquire Beijing Suning Life Plaza, a mixed-use development, from China’s debt-ridden Suning Real Estate for a total consideration of S$553 million ($411.4 million).
CapitaLand acquired the asset through a newly established S$291-million ($216.7 million) single-asset fund. It will invest in repositioning and upgrading the retail space into a Grade A office that is expected to command a higher rent.
The Beijing Suning Life Plaza comprises commercial and office components on a total site area of about 66,300 square metres (714,000 square feet). The asset repositioning is scheduled to start in the first quarter of 2023.
The single-asset fund is one of the two vehicles that CapitaLand Investment (CLI) set up in February as the Singapore-based real estate group plans to invest a total of S$1.1 billion ($818.6 million) in special situation opportunities in China.
CLI secured S$892 million from global institutional investors for the S$1.1-billion CapitaLand China Opportunistic Partners (CCOP) Programme. The firm itself contributed to the remaining S$223 million with a 20% stake.
The programme includes the above single-asset fund and an S$824-million programmatic joint venture that will invest in special situation opportunities in China. Investors will retain full discretion on whether to participate in each investment proposed under the JV.
In its first transaction, the JV acquired a high-quality logistics development in southern China’s Foshan City, Guangdong Province for S$157 million ($116.8 million). CLI completed the acquisition in May 2022 as a seed asset for its CCOP Programme.
The build-to-suit logistics development is 100% pre-leased to a domestic textile e-trading platform under a 15-year contract. The construction of the logistics development in Foshan is expected to complete in the third quarter of this year.
“The CCOP Programme complements CLI’s recent drive to raise onshore domestic capital to pursue real estate opportunities across the risk spectrum in China,” said CLI in a statement.
Since June 2022, CLI has launched three onshore RMB funds, raising close to S$780 million ($580.7 million) in third-party capital and bringing 10 new Chinese investors into CLI’s network of capital partners.
With the addition of its recently announced CDCP fund and the latest deals under the CCOP Programme, CLI has raised more than S$2 billion ($1.5 billion) in third-party capital to invest in seven quality assets in China.
As of December 31, 2022, CLI has a total of 12 private investment vehicles in China holding 31 properties with funds under management (FUM) of S$21.3 billion ($15.9 billion).