CapitaLand buys Guozheng Centre for S$535m; divests Innov Tower

CAPITALAND said on Thursday that it has agreed to buy Guozheng Center, a newly completed office development in Yangpu District, Shanghai, China, for RMB2.64 billion (S$535 million).

Based on total gross floor area (GFA) of 80,701 square metres (sqm), the price translates to an investment of RMB32,713 (S$6,628) per sqm.

CapitaLand will also be divesting Innov Tower, an eight-year-old office building located in Shanghai's Xuhui District, to an unrelated party at RMB1.56 billion (S$316 million), which works out to RMB38,500 (S$7,800) per sqm based on the total GFA of 40,445 sqm. The divestment is expected to generate net profits of about S$85 million.

"The divestment of Innov Tower allows us to unlock and realise the value of a stabilised asset at an optimal stage of its life cycle, while the acquisition of Guozheng Center allows us to immediately redeploy the capital to another quality income-generating asset,'' Lim Ming Yan, President and Group CEO of CapitaLand Limited, said.

Both transactions are expected to be completed in June 2017.