CapitaLand has unveiled plans to build a 21.1 billion yuan (S$4.1 billion) mixed-use development in Chongqing, despite growing concerns over the possibility of a sharp slowdown in the Chinese property market.
Yesterday, CapitaLand and CapitaMalls Asia (CMA) announced they were part of a consortium that won the 91,783 sq m site, located between Chao Tian Men Square and Chongqing’s traditional central business district (CBD), for 6.536 billion yuan (S$1.33 billion).
Comprising a shopping mall and eight towers for residential, hotel and office use, the development will be funded through a mix of debt and equity.
According to Liew Mun Leong, President and Chief Executive of CapitaLand Group, the land cost will be funded by investor equity, while construction costs will be funded by bank loans.
Designed by renowned architect Moshe Safdie, the proposed development will have a total gross floor area (GFA) of 817,000 sq m. Construction of the project will start in late 2012 and is expected to be completed before end-2017.
“In our view, CapitaLand’s focus on the long-term makes sense given the nature of its business and expertise,” said Liew.
“Greenfield projects, especially those such as (the Chongqing) mixed development project, take between four to five years to complete. Hence, CapitaLand is, in essence, allocating capital to its view that China will continue to outperform based on long-term fundamentals, and not so much to whether market dislocation will occur in the next year or two.”
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