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CapitaLand, CRCT in 49:51 tie-up to buy Rock Square mall in Guangzhou for 3.36b renminbi

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CAPITALAND and CapitaLand Retail China Trust (CRCT) have formed a joint venture (JV) to acquire all the shares in a company that owns Rock Square mall in Guangzhou's Haizhu District.

CAPITALAND and CapitaLand Retail China Trust (CRCT) have formed a joint venture (JV) to acquire all the shares in a company that owns Rock Square mall in Guangzhou's Haizhu District.

The total purchase consideration payable is about 3.36 billion renminbi (about S$688.9 million). The transaction is expected to be completed by Q1 2018.

CRCT is the majority shareholder with a 51 per cent stake in the JV, while CapitaLand owns the remaining 49 per cent.

This marks CapitaLand's second mall and CRCT's first in Guangzhou, the provincial capital of Guangdong Province in south China and one of four first-tier cities in the country.

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Rock Square is one of the largest malls in Haizhu District with a gross floor area (GFA) excluding car park of about 83,591 square metres.

Opened in 2013, Rock Square is a five-storey shopping mall with three levels above ground and two basement levels. "Positioned as a modern and trendy retail destination offering a wide range of fashion, F&B, children-oriented and entertainment options, the mall houses well-known international brands such as Aeon, Uniqlo, Zara and Victoria's Secret,"CapitaLand and CapitaLand Retail China Trust Management said in a joint release issued after the market closed on Tuesday.

As at June 2017, the mall was 96.4 per cent committed, they added.

Separately, CRCT announced the launch of a private placement of 51.514 million new units in the trust, with the bulk of the proceeds to be used to go towards partly funding the trust's acquisition of its stake in Rock Square. The units will be issued at between S$1.553 and S$1.612 per new unit to raise gross proceeds of at least S$80.0 million, subject to an upsize option to issue up to 12.878 million additional new units to raise a further S$20.0 million.

The issue price range represents a discount of between 3.5 per cent and 7.0 per cent to the volume weighted average price (VWAP) of S$1.6707 per unit in CRCT for all trades done on Tuesday.

CRCT makes semi-annual distributions to unit holders. Due to the private placement, however, the trust manager plans to declare an advance distribution on existing units for the period July 1 to Dec 6, being the day just before the date on which the new units will be issued under the private placement. The next distribution will be for the period from Dec 7 to Dec 31.

Semi-annual distributions will resume thereafter.

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