Sept. 29 (Bloomberg) -- CapitaMalls Asia Ltd. said it agreed to form a venture to invest 6.7 billion yuan ($1.05 billion) in a shopping mall and office development in the eastern Chinese city of Suzhou to expand in its biggest market by assets.
The development will include a retail mall and two office towers, and will be jointly owned by Suzhou Industrial Park Jinji Lake Urban Development, the master developer of the city’s business district, the Singapore-based retail property owner said in a statement today.
“This project bears out our strategy to capitalize on our strengths and entrench our presence in the cities and regions that we are already in,” Lim Beng Chee, CapitaMalls’s chief executive officer, said in the Singapore exchange statement.
The company is expanding in China, which makes up 44 percent of its S$6.19 billion ($4.8 billion) of assets, to tap on the nation’s economic growth and retail sales. Demand for Chinese retail space helped drive a 42 percent surge in commercial real estate investments in the country last year, according to Cushman & Wakefield, a New York-based real estate services firm.
Construction for the 310,000 square-meter (3.3 million square-foot) project is expected to start next year and complete within four years, CapitaMalls said. The mall will account for 81 percent of the space, it said.
The stock dropped 1.2 percent to S$1.19 as of 10:35 a.m. in Singapore trading.
CapitaMalls said it picked Suzhou for its prospects as China’s fifth-largest city by gross domestic product and proximity to Shanghai via a 30-minute train ride. The company is a unit of CapitaLand Ltd., Southeast Asia’s biggest developer.
CapitaMalls, which developed ION Orchard in Singapore, has 55 shopping retail properties in China, including the Raffles City developments in Beijing and Shanghai.
--Bonnie Cao. Editors: Linus Chua, Malcolm Scott
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