[photopress:property_Xihuan_Plaza.jpg,full,alignright]Singapore-listed CapitaRetail China Trust has successfully completed a $132 million follow-on share offering that will be used to pay for the earlier announced acquisition of Xizhimen Mall in Beijing.
The timing of the fixed-price deal was, perhaps, less than ideal. The equity markets are, politely, volatile at the moment. And CapitaRetail is trading at its lowest levels since its IPO and has lost 93% of its market capitalization since early October.
However, the company decided to buy only the completed first phase of the Xizhimen shopping mall, while initially it was planning to also buy the second phase which is still under development.
Because it is now buying only the portion of the mall that is already providing a steady cash flow it makes the acquisition somewhat easier. That being said getting such a deal done in the current market environment at all is no small feat.
Commenting on the purchase, Lim Beng Chee, CEO of CapitaRetail China Trust Management, said: ‘Sitting atop one of Beijing’s only two key transportation hubs with an average commuter flow of 300,000 on weekdays and 600,000 on weekends, Xizhimen Mall is well-positioned to capture the tremendous daily pedestrian traffic to the mall.’
The other properties are Wangjing Mall, Jiulong Mall and Anzhen Mall in Beijing, Qibao Mall in Shanghai, Zhengzhou Mall in Zhengzhou, Jinyu Mall in Huhehaote, and Xinwu Mall in Wuhu.
The Xizhimen mall is part of the Beijing’s Xihuan Plaza complex, which also includes three office towers. It has seven stories of retail space and attracts about 300,000 shoppers on an average weekday and twice that on the weekend. There is a YouTube of people dancing in the mall. It isn’t well lit, well focused or well shot but it shows you it is there and pretty active. Our illustration is taken from that video.
In September last year it was valued at about RMB1.7 billion by two separate independent valuers.
CapitaRetail has an option to buy phase two of the mall, which will connect it with two adjacent underground and railway stations, when it has been completed, subject to certain conditions.
Source: Finance Asia