CapitaMalls Asia forays into Hong Kong

Singapore-listed mall developer CapitaMalls Asia has received in-principle approval for a secondary listing in Hong Kong.

It plans to list by way of introduction, without raising any new equity, on the mainboard on October 18.

CapitaMalls Asia may not be raising new capital from its listing in Hong Kong, but the move will allow the mall developer to widen its investor base here in Hong Kong and by default China.

This is expected to help improve its market visibility and trading liquidity – which then opens up additional sources of funding for the company.

CapitaMalls Asia is a unit of CapitaLand – southeast Asia’s biggest developer by market capitalisation.

It has shopping malls across Asia, but China is seen as a key market.

Currently, the Chinese mainland accounts for 44 per cent of its total property portfolio, by market value.

“Today, our exposure in China is about US$2 billion. But in terms of the assets that we manage, it’s already about US$8 billion, because of the funds that we manage. What we mean is that we want to double that, in the next three to five years to US$16 billion,” said Mr Lim Chee Beng, CEO of CapitaMalls Asia.

Earlier this week, CapitaMalls Asia formed a US$1 billion joint-venture with Suzhou Industrial Park to develop a retail mall and two office towers.

It’s also teaming up with Hong Kong developer Hang Lung Properties to build high-end shopping malls, with its first project in Kunming.

CapitaMalls Asia has a healthy pipeline of projects across the region and is planning to add another 26 malls in the next three years, on top of the current 70.

“We view this as a long-term strategic move. We recognise that (liquidity is not going to be there), but that’s no worry for us because we’re well traded in Singapore. But over time, we believe that will be corrected,” said Mr Lim.

In initial market reaction to the news, research house RBS said CapitaMalls Asia’s longer-term valuation may move closer in-line with its Hong Kong partner Hang Lung Properties, currently trading at 0.9 times fiscal 2011 earnings.

CapitaMalls Asia now trading at 0.77 times.

Source : Channel NewsAsia – 30 Sep 2011

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