CapitaLand says its growth in China remains on track

Singapore real estate company CapitaLand has said its growth in China remains on track amid slowing economy and leadership transition in the country.

It still expects China to account for 45 per cent of the company’s assets in the next three to five years.

CapitaLand’s outgoing CEO Liew Mun Leong said the company is also in a good position to compete with state-owned enterprises in China.

Lim Ming Yan will take over from Mr Liew as president and CEO from 1 January next year.

The S$4 billion Chao Tian Men mixed-use development is one of CapitaLand’s projects in China.

In the past few years, it has grown its presence in the Chinese real estate market.

Assets in China now account for 38 per cent of CapitaLand’s portfolio, and this is set to grow to 45 per cent within the next five years.

Speaking at the sidelines of the CapitaLand International Forum, Mr Liew said rapid urbanisation in China will help to boost its business.

He does not expect the new Chinese leadership to implement changes that will overly affect the real estate sector, as it contributes up to 15 per cent of China’s gross domestic product (GDP).

CapitaLand believes it has the ability to compete against well-capitalised state-owned enterprises there.

Mr Liew said: “Very few state-owned enterprise have such a wide spectrum of real estate sectors which we have so to that extent, we are still more competitive in a balanced approach in real estate. We do not entirely rely on bank borrowings, we go into the capital market to recycle our capital so that we can do more businesses.”

Some industry watchers believe that the private sector can flourish under China’s new leadership.

Professor Wang Gangwu, chairman of the East Asia Institute, said: “The state is concerned for a transformation and a changeover to a consumer society means that certain major changes have to take place, and while these changes are taking place, they are unlikely to reduce the role of state-owned enterprises.

“In the long run, the private sector will grow because the state-owned enterprises will continue to dominate areas reserved for them, but they will not be encouraged to expand into new areas, so it is up to the foreign enterprises and the local enterprises to look for new areas and markets where the state-owned enterprises will not have any advantage.”

Currently, Chinese state-owned enterprises remain dominant in industries, including banking, telecommunications, crude oil as well as iron and steel production.

China remains the world’s largest exporter and manufacturer, with its global GDP expected to grow to 33.4 per cent in 2030.

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