CapitaLand to buy Orient Overseas’ Chinese property assets

KUALA LUMPUR: CapitaLand Ltd., Southeast Asia’s biggest developer, further increased its presence in China when it reached an agreement to buy the Chinese property assets of Orient Overseas (International) Ltd for US$2.2 billion (RM7.34 billion).

According to a Shanghai Daily.com report on Jan 19, CapitaLand (China) Investment will acquire a 100% stake in Orient Overseas Developments (China) Ltd, which has seven real estate projects under development in Shanghai, Kunshan and Tianjin. Combined, the seven projects have about 1.48 million sq m of floor space, CapitaLand said in a statement on Jan 18.

The acquisition has once again indicated our long-term commitment to the China market," Jason Leow, chief executive officer of CapitaLand China Holdings (a wholly owned subsidiary of CapitaLand), was quoted as saying to Shanghai Daily.com."By obtaining projects in prime locations we are going to further expand our China portfolio strategically in both eastern and northern parts of the country," he added. CapitaLand wants China to account for 35% to 45% of its business in the next five years.

CapitaLand may continue looking at other acquisitions in China and other countries like Vietnam and even home base Singapore following the deal.

Meanwhile, Orient Overseas said in a statement on Jan 18 its property unit has lost money over the past two years. It added that it will keep a 7.9% stake in Beijing Oriental Plaza and its wholly owned Wall Street Plaza in New York City after the deal.

Orient Overseas is Hong Kong’s biggest container line but it was heavily hit by the slump in global trade. It now plans to exit the real estate segment in China.