June 28, news (www.thepaper.cn) It is learned that the Singapore real estate developer CapitaLand Group and Ping An Life Insurance of China signed a cooperation agreement to sell part of the equity of China’s 6 Raffles asset portfolio to the latter.
The projects involved in this cooperation include Raffles City Shanghai, Raffles City Beijing, Raffles City Ningbo, Raffles City Chengdu, Raffles City Changning and Raffles City Hangzhou , The total asset value of the asset portfolio is 46.7 billion yuan, and Ping An acquired part of the equity. It is reported that Ping An Life’s total investment amount does not exceed 33 billion yuan.
After the completion of a series of transactions, CapitaLand’s shareholding ratio in each project has changed from 30.7% to 55% held by private equity funds before the transaction to 12.6% to 30%, and continue to be responsible for project operation and asset management. The transaction is expected to be completed in the third quarter of 2021, and will achieve capital recovery of more than S$2 billion (approximately RMB 9.615 billion) for CapitaLand.
CapitaLand Group CEO Li Zhiqin said: “CapitaLand will continue to hold equity in these six Raffles projects and will be responsible for project operations and asset management. We Capable of promoting and participating in the future growth of the project. CapitaLand has built investment property reserves of more than 24.4 billion Singapore dollars in the 27 years since its entry into China.”
Raffles is CapitaLand Its flagship complex brand originated from Singapore. Since the brand entered China in 2004, it has developed 9 complexes in China, including the aforementioned Shanghai Raffles City, Beijing Raffles City, Ningbo Raffles City, and Chengdu Raffles City, Changning Raffles City, Hangzhou Raffles City, as well as Chongqing Raffles City, Shenzhen Raffles City, North Bund Raffles City.
Pan Zixiang, Chief Executive Officer of Investment and Portfolio Management of CapitaLand Group (China), said: “The Raffles investment portfolio is located in gateway cities and is closely connected to major transportation hubs. In 2020, the average fund management fee rate of the 6 Raffles investment portfolios involved in the transaction is about 62 basis points, which is a mature asset that can provide stable recurring income.”
Regarding the funds recovered from this transaction, Pan Zixiang said, “Part of the funds recovered from this transaction will be used for key investment in new economic assets such as data centers. In the next few years , We plan to expand the scale of our new economic assets in China from 1.5 billion Singapore dollars at the end of 2020 to 5 billion Singapore dollars. Our investment focuses on industrial parks, logistics and data centers.”
For Ping An Life, it purchased part of the equity of 6 Raffles projects to maintain and increase the value of insurance funds. The relevant person in charge of Ping An Life stated that the CapitaLand Raffles project invested by Ping An Life is mainly commercial office real estate. Among the target assets, six projects including Shanghai Raffles Square are the core high-quality assets of CapitaLand, with excellent tenant quality. The lease is stable. This investment conforms to the principle of matching the assets and liabilities of insurance funds, can optimize the allocation of insurance funds, and obtain a good and stable return on investment, so as to maintain and increase the value of insurance funds. This investment is not an additional investment and does not involve the date of the first investment. As an investment entity, it invests in real estate by directly holding equity in each project company.
Ping An Life Insurance stated that after becoming a shareholder of the six project companies, it will form related parties based on the equity relationship with the six project companies. Ping An Life intends to provide shareholder loans totaling approximately 4.1 billion yuan to five of the project companies (the final amount will depend on the funding requirements of the underlying projects, and the actual capital contribution shall prevail).
CapitaLand Group’s official website shows that CapitaLand is a large diversified real estate group headquartered in Singapore and listed in Singapore. Its investment portfolio includes office buildings, shopping malls, industrial parks, industrial and logistics real estate, commercial complexes, urban development, serviced apartments, hotels, long-term rental apartments and residential buildings. CapitaLand entered China in 1994, and China is one of the group’s two core markets. Currently, CapitaLand owns or manages more than 200 projects in 42 cities in China. CapitaLand Group’s real estate investment management business scale is also leading in the world. It manages 6 listed real estate investment trusts (REITs) and business trusts, as well as more than 20 private equity funds, and is a real estate asset and fund manager with development capabilities. As of the end of the first quarter of this year, CapitaLand Group’s fund management scale was 79.2 billion Singapore dollars (approximately 380.97 billion yuan).
For Ping An Life, referring to relevant regulatory regulations, Ping An has matched a certain percentage of commercial real estate assets in its strategic asset allocation. The reason is, Commercial real estate assets better match the characteristics of insurance liabilities in terms of duration and income, and have a relatively high safe investment margin even in the lower economic period.
According to Ping An Life’s relevant announcements, after the completion of the investment, the balance of investment in Ping An Life’s target projects accounted for approximately 1.0% of the company’s total assets at the end of the quarter. . As of the first quarter of 2021, Ping An Life’s comprehensive reimbursement rate is 239.18%, and the verified reimbursement rate is 234.30%, which meets regulatory requirements.