CapitaLand seeking to exploit market opportunities with rights issue

Property giant CapitaLand is looking to pad its portfolio with good buys amid the current global recession.

The company aims to raise S$1.84b in a rights issue, and is eyeing distressed assets in China.

China is one of its key markets, accounting for some 45 per cent of CapitaLand’s earnings.

Liew Mun Leong, CapitaLand Group president and CEO, said: “In China, we are quite well known for taking over distressed property and making money out of it, even in good times. Obviously in bad times, the number of opportunities will increase, both at the asset level, as well as the companies level.”

Despite its aggressive acquisition plans, CapitaLand itself has not been immune to the downturn.

In its full-year results for 2008, the property firm saw net profit fall 54 per cent to S$1.26b.

Revenue for 12 months ended December also fell 27.4 per cent to S$2.75b.

The firm has already put in place measures aimed at controlling falling rents and sales.

And it says it will continue with this strategy in 2009.

CapitaLand Group chief financial officer, Olivier Lim, said: “We’ve made some announcements about prioritising certain projects, and I made the comment about us not starting construction unless we have sufficient sales. All those will reduce the amount of capital required for any commitments.”

CapitaLand saw a difficult fourth quarter, with sales from China and Australia shrinking as global demand dried up.

Compared to last year, its fourth quarter revenues fell by half, and net profit slipped by almost 90 per cent.

Source : Channel NewsAsia – 9 Feb 2009

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