CapitaLand Investment remains long-term positive on China

CAPITALAND Investment Limited (CLI) remains long-term positive on China and believes that the current headwinds may generate interesting counter-cyclical and opportunistic investment themes.

The real estate investment manager said this in a bourse filing on Thursday (Apr 28) in response to shareholder questions about the uncertainties it faces in China ahead of its annual general meeting on Friday. 

While acknowledging the internal and external pressures faced by China since end-2021, it said its view on China is premised on China’s "Two Sessions" policy announcements that call for supportive pro-business and pro-consumption stimulus to steer economic and employment growth, while addressing concerns over the real estate sector and its capital markets.

It said: “China has expressed the intention to soften and balance the economic impact of the various pressures it currently faces. For example, the Chinese government has in recent months implemented cuts in the reserve requirement ratios to provide liquidity support for the market to help stabilise growth.”

CLI believes its extensive domestic presence presents a competitive advantage that will not only allow it to successfully navigate through this heightened period of uncertainty, but also enable it to identify and capitalise on the resulting investment opportunities that may emerge. 

It noted that its successful registration as a private equity fund manager in 2021 allows CLI to conduct renminbi-denominated fund raising and provide fund management services in China. 

“This will expand our current suite of fund management capabilities, and allow us to tap on Chinese domestic fund flow, further expanding CLI’s fund raising channels.”

Within China, CLI’s presence spans across first and second tier cities in 5 core city clusters.  

It has also been actively diversifying its asset class involvement beyond CLI’s traditional expertise in commercial and retail to new economy asset classes like business parks, logistics and data centres. 

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“This reduces risk concentration in any single province/city or asset class, and enhances the overall resilience of our portfolio." 

The counter was up 1.47 per cent or S$0.06 at S$4.14 as at 11.35 am on Thursday.