CapitaLand plans Singapore listing of retail unit

October 5, 2009
Singapore Democrats

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Shiyin Chen
Bloomberg

CapitaLand Ltd., Southeast Asia’s largest developer, plans to list its CapitaLand Retail Ltd. subsidiary in Singapore to tap growth in Asia’s shopping mall industry.

CapitaLand Retail will be renamed CapitaMalls Asia Ltd. and will have stakes in and manage malls valued at S$20.3 billion ($14.4 billion) as of June 30, the company said in a statement to the Singapore stock exchange today. The unit will take control of CapitaLand’s retail real estate fund and property trust management business.

Selling a stake of 20 percent to 30 percent would be “comfortable,” Chief Financial Officer Olivier Lim said at a briefing in Singapore. He said it’s too early to discuss a valuation of CapitaMalls Asia and that the company “can be patient” regarding the timing of the initial public offering.

Chief Executive Officer Liew Mun Leong has said CapitaLand wants to expand its real-estate services business along with the main property development operations. The listing of the unit follows offerings in other units including CapitaMall Trust and CapitaCommercial Trust in Singapore since 2002.

CapitaMalls Asia’s portfolio includes 59 completed malls in China, Malaysia, Japan, India and Singapore, including the Ion Orchard development on the city-state’s Orchard Road shopping strip. Another 27 properties are currently being developed.

CapitaMalls Asia will also take a 15 percent stake in Raffles City China Fund, which has stakes in four Raffles City- branded developments in the nation, according to the statement.

Special dividend

“The proposed listing of CapitaMalls Asia is consistent with CapitaLand Group’s approach of optimizing business growth with prudent capital management,” Chairman Richard Hu said in the statement. “This transaction is also a logical evolution of CapitaLand’s business model and will allow us to accelerate our next phase of growth.”

CapitaLand said it plans to sell part of its stake in CapitaMall Asia to ensure “sufficient trading liquidity” in the stock, pending approval from its shareholders. It will retain majority control of the unit following the share sale and for the “foreseeable future.”

After the initial share sale, CapitaLand said it may recommend a special dividend for its shareholders.

CapitaLand will consider a secondary listing for CapitaMalls Asia on another exchange, possibly in China, “in time to come,” CEO Liew said at the briefing.

CapitaLand, whose shares were halted before the announcement, gained 0.3 percent to S$3.67 on Oct. 2 in Singapore trading. CapitaRetail China Trust fell 0.8 percent to S$1.19, while CapitaMall Trust dropped 2.7 percent to S$1.82. CapitaRetail China Trust and CapitaMall Trust were both also suspended.

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