Former CapitaLand CEO plans China, Singapore funds

SINGAPORE: Perennial Real Estate, a firm set up by CapitaLand’s former retail chief Pua Seck Guan, plans to launch private equity funds that will invest in shopping malls in China and Singapore to tap the region’s growing consumer demand.

“Particularly in China, there is a huge amount of opportunity. There is no shortage in the pipeline (and) we can still buy malls at good valuations,” Pua, who is Perennial’s CEO, told Reuters in an interview, adding he did not see the risk of a property bubble in retail properties.

Perennial has just closed a 1.2 billion yuan (RM568.39 million) Chinese shopping mall fund aimed at Chinese investors and started pre-marketing a similar fund aimed at international investors. Beijing Hualian Group, a large Chinese retailer, is a cornerstone investor in the yuan-denominated fund, he said.

Chinese malls that the Perennial funds invest in will be divested to Shenzhen-listed Beijing Hualian Department Store once the malls develop a track record and are able to deliver steady rental returns.

The Shenzhen firm, which now owns 24 malls, is in the process of being renamed to reflect its new status as an investment vehicle for investors seeking predictable dividends with the possibility of capital appreciation, Pua said.

He declined to say how much Perennial hoped to raise for its China fund from international investors.

As for Singapore, he said the firm hoped to raise a S$300 million (RM693.43 million) to S$400 million fund that will invest in underperforming malls as well as develop new projects.

Pua, widely credited with building CapitaLand’s shopping mall business, resigned from CapitaLand in September 2008, sparking a 7% fall in the firm’s share price amid already uncertain market conditions. — Reuters