CapitaLand Investment Limited (CLI) 9CI has formed a RMB2.4 billion ($447 million) joint venture with AIA Life Insurance (AIA) to recapitalise Capital Square Beijing, a Grade-A office building in Beijing, according to a Jan 31 announcement.
Under this partnership, CLI will divest a 95% stake in Capital Square Beijing to AIA and hold the remaining 5% stake. CLI will provide asset management services for the joint venture, which will contribute to its recurring fee income.
Located in the Central Business District in Chaoyang District, Capital Square Beijing was acquired in October 2022 through a court auction.
Following the acquisition, an asset enhancement initiative was undertaken to upgrade its facilities. The property has a total gross floor area (GFA) of 44,759 sq m above ground.
Puah Tze Shyang, chief executive officer of CLI (China), says: “Despite a challenging fundraising and operating environment, we have successfully brought in AIA as a joint venture partner in Capital Square Beijing as part of our disciplined capital management. CLI’s joint venture with AIA demonstrates the trust that capital partners have in our on-the-ground expertise to unlock value from our assets and deliver strong returns.”
This is the second time CLI is partnering with AIA in China, following the insurer’s investment in one of CLI’s RMB funds in 2022. “We remain focused on being asset light and capital efficient while continuing to scale up our fund management business,” adds Puah.
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Over the past year, CLI has recycled more than RMB3 billion in capital in China.
In 2023, CLI divested a partial stake in a high-quality logistics development in Foshan, Guangdong to the CapitaLand China Opportunistic Partners Programme, which was established in February 2023 to invest in “special situation opportunities”.
Earlier this month, CLI divested CapitaMall Shuangjing in Beijing via the CLI-sponsored CapitaLand China Trust AU8U , Singapore’s largest China-focused real estate investment trust.
CLI has more than 200 properties across over 40 Chinese cities with total assets under management of $45 billion in the country, as at Sept 30, 2023.
CLI’s portfolio in China includes office, retail, lodging, business parks, logistics and data centres in five core Tier-1 and two city clusters. CLI’s five core city clusters in China are: Beijing/Tianjin; Shanghai/Hangzhou/Suzhou/Ningbo; Guangzhou/Shenzhen; Chengdu/Chongqing/Xi’an and Wuhan.
On Jan 30, shares in CapitaLand Investment closed 2 cents higher, or 0.68% up, at $2.97; while units in CapitaLand China Trust closed 1 cent higher, or 1.21% up, at 83.5 cents.
