SCPG, Vanke and Triwater to Jointly Acquire Stakes in Companies Holding 20 Retail Malls in China

SINGAPORE, January 5, 2018

SCPG Holdings Co., Ltd, a leading shopping mall owner, developer and operator in China, today announced that the Company has teamed up with China Vanke Co., Ltd and Triwater Asset Management Holdings Limited through their respective wholly-owned subsidiaries, in reaching an agreement with CapitaLand Mall Asia Limited (“CMA”), a wholly owned subsidiary to CapitaLand Limited, to jointly acquire 100% equity and undertake corresponding loans of 20 shopping mall holding companies at the price of RMB 8.365 billion. The transaction is still subject to approval by relevant Chinese regulators.

The transaction involves 20 shopping malls with a total gross floor area of around 950,000 square meters, located in core areas across 19 cities in Northern, Eastern, Southern and Midwestern China with steady performance and solid consumer bases. SCPG will take over and operate all the 20 shopping malls upon the completion of the deal, and set out to upgrade in line with the brand positioning and operation standards of the “IN-” series. Following the deal, SCPG will speed up in further expanding its foothold into the market, obtaining more customer resources, promoting the strategy of stock assets optimization, and enhancing synergy among different forms of businesses. With the new assets coming in, SCPG will hold and manage 120 retail properties with gross floor area of 10 million square meters across 58 cities in China, with assets value of RMB 80 billion.

Ding Li-ye, Senior Vice President of Vanke and Chairman and President of SCPG commented, “China is on a faster track of urbanization and people are longing for a better life. We hold a very optimistic view on the potential value of the commercial real estate stock of assets. Acquiring the equity of the holding companies of CMA’s mature assets is aligned with SCPG’s development strategy.

“First of all, those shopping malls have precipitated excellent mall management talents. After the transaction is completed, the original team will be retained. Taking in such a group of professionals is significant for the talent reserve and future growth of SCPG. Secondly, the newly acquired projects are within the management scope of SCPG’s six regional offices. They will make our business networks wider and deeper. We will also have the capacity to expand our business to the core areas and outskirts of the city. During this process, resources in the company’s regional platforms will be well shared. Furthermore, most of these shopping malls in this transaction have been developed by SCPG and CapitaLand’s joint venture team. They are located in mature business districts with great advantages of customer value. We have long followed the market where they have presence and accumulated a profound understanding of them. Hence, we are confident that we are in the position to provide more quality service experiences for the local customers.”

SCPG, a China-based enterprise, has been committed to the commercial real estate sector in China in the past fifteen years, and always following the prudent asset investment strategies. As a new era of the commercial real estate is coming, a growth strategy which combines self-development and asset acquisitions has been adopted by SCPG since 2014. The Company puts most of its efforts on exploring core business areas and surrounding urban clusters and revitalizing stock of assets in a bid to upgrading the cities. The recently re-opened INCITY shopping mall in Shenyang used to be an electronics and home appliances centre for over a decade. SCPG spent roughly a year in implementing asset enhancement plans and successfully turned it into an experience-centric compound to cater for the local needs. In spite of 38% of decline in the gross retail area, the refurnished mall saw 63% of rise in daily sales, 129% of surge in daily visits and 74% of growth in total rental income.

At the end of 2016, SCPG became Vanke’s commercial real estate platform, and established six regional offices covering city clusters with Guangzhou, Shenzhen, Beijing, Shanghai, Hangzhou, Wuhan and Xi’an as their pillars. Through this consolidation, the Company has gained better business resources, platforms and development management capabilities. With a wealth of experience in commercial real estate development and operation, as well as the integrated value chain model, SCPG targets middle-class households with a primary focus on developing the “IN-” series of regional shopping malls and community shopping malls. Driven by the mission of “building an iconic shopping destination, delivering an experience that people love”, the Company aspires to meet the growing demand for better consumption and leisure experience by offering quality shopping experience and keep upgrading our shopping malls facilities.

With experienced management teams and premium business resources, SCPG strives to be the best commercial real estate platform that understands customers’ needs and always stay relevant. The Company assumes the responsibility of exploring more innovative services, better ways of using spaces and more impressive digital experiences. The technology platform “IN-Digital” launched in 2017 has helped the Company deliver customized experience to shoppers with the deployment of precise marketing, smart service and operational innovation.

The commercial real estate sector is about to move into a new era. On one hand, the commercial real estate industry has seen stiff competition and will go through a new round of change. The value of current assets will be further unleashed. On the other, online retailers have scrambled to go brick and mortar. It is believed that the future will see an integration of e-commerce and brick and mortar businesses. While it might be relatively easier for a business to establish an online presence, going offline would require more resources and efforts.

In the future, SCPG will continue to look for more acquisition opportunities of stock assets, obtain offline traffic resources by acquiring high-quality stock assets; optimize customer experience by creating incremental value of stock assets, activate social resources and create a scene-oriented urban space. SCPG is also committed to becoming the leading commercial real estate platform in China and continues to make a difference to China’s consumption landscape and business innovation.