CapitaLand Retail delays land purchases in China
Updated: 2009-06-24 07:15
(HK Edition)
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SINGAPORE: Land on the mainland remains too expensive for CapitaLand Retail Ltd to make acquisitions, therefore the unit of Southeast Asia's biggest developer will focus on completing its shopping mall projects in the country, a company official said yesterday.
"I don't think it's the right time" to buy more land for retail projects on the mainland, Lim Beng Chee, chief executive of CapitaLand Ltd's retail unit, said in an interview.
Hong Kong's Hang Lung Properties Ltd and Shimao Property Holdings Ltd resumed land purchases on the mainland this year as home prices rose in the world's third-biggest economy. CapitaLand Retail operates 29 malls on the mainland, and plans to open 29 more in the next three years, Lim said yesterday in Singapore.
The company's approach is "understandable" given its "huge pipeline" of new projects, said Brandon Lee, a Singapore-based analyst at DMG & Partners Securities Pte. "They have more than enough to get through another economic cycle. I see them expanding in residential for CapitaLand as a group."
Singapore-based CapitaLand Retail plans to open nine malls on China's mainland this year, 10 next year and 10 in 2011, which Lim said will have a combined value of S$5 billion ($3.4 billion).
"It's actually a good time as the malls for CapitaLand in China are mostly in the suburban areas that are close to the housing estates where there's a lot of non-discretionary spending," DMG's Lee said.
Further expansion is hampered by a lack of affordable land, and fewer distressed mall assets, Lim said.
"Even if it's distressed, how many malls can we buy in China? What we need to buy is maybe a piece of land," he said.
Bloomberg News
(HK Edition 06/24/2009 page4)