CapitaLand - Adding to presence and financial capacity in China

Tuesday, June 9, 2009

CapitaLand to add another Raffles City project in Ningbo, China. The group over the weekend announced another Raffles City integrated development project in Ningbo, a major port city in Zhejiang province, China. The complex is expected to be completed in 2012, with a 97,900sqm of GFA comprising a 50,000sqm shopping mall, a 30,000sqm office tower and a 20,000sqm tower with serviced residences. The site on which this project will be built was acquired in 2005 and is in the heart of Ningbo, adjacent to the group's Summit Residences project, an 850-unit development expected to be completed in 2010.

Group has signed credit allocation agreements with Bank of China and ICBC of up to RMB25billion (S$5.3billion) that would give CapitaLand China Holdings and its subsidiaries and affiliates such as the 9 managed real estate private equity funds, CapitaRetail China Trust and Ascott Residence Trust (collectively “CCH group”)access to onshore debt funding in RMB. Terms and conditions of loans to CCH group under the credit allocation agreements would be mutually agreed before the loans are drawn down, but these agreements ensure CCH group access to debt funding for at least the next 3 years.

S$6.5billion of capital employed in China, 26% of group assets at end 08 book value, but this could rise towards 40-45% of group assets within the next 2-3 years (as management have guided) as large scale projects such as the Raffles City complexes (now 5 in China: Shanghai, Beijing, Chengdu, Hangzhou and Ningbo) add to the total. The group’s 58 retail malls (operational or under development) in China would also contribute to this growth in the exposure and capital employed.

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