CapitaLand defers Australand JV
Group puts industrial/logistics tie-up on hold amid refocus on existing core businesses
CapitaLand is putting on hold its tie-up with subsidiary Australand to set up a pan-Asian development platform in the industrial/logistics business. This comes as it refocuses on its existing core businesses.
CapitaLand group president and CEO Liew Mun Leong told BT in a recent interview that given the current turmoil in global financial markets, ‘we would rather focus on our existing portfolio in the Asian market now than to proliferate into new businesses or geographies’. He added: ‘We have refocused back into residential, shopping mall, office space.’
‘Don’t forget, every time you branch out into a new area, you have to talk about human resource, financing, etc,’ said Mr Liew. ‘But of course, Australand is at liberty to do what they want to do. They are free to go into China, Vietnam or India for the industrial business. They are a separate listed company; so we cannot stop them.’
Mr Liew said the tie-up with Australand is ‘not being actively pursued’, but added: ‘It is not dead. If there is an exceptionally good idea, we will still look at it. The arrangement is there.’
Similarly, CapitaLand will not be actively pursuing projects in Russia, which it had earlier targeted as a market for expansion. The Singapore-based property giant had previously said it was exploring the residential and office property markets of affluent Russian cities such as Moscow and St Petersburg, as part of its strategy to invest in fast-growing oil-rich countries.
Mr Liew said: ‘Given this current tumultuous economic environment, we want to focus our strengths in HR and finance in the areas where we are traditionally strong - and we have a firm market such as Asia - instead of starting a new product line like industrial or actively pursuing a market where we are relatively new.’
The tie-up with Australand was announced in February this year, when CapitaLand posted record net earnings of $2.76 billion for the year ended Dec 31, 2007.
The joint venture was to identify suitable development sites for projects, in which CapitaLand would take a 51 per cent stake, with Australand owning the remaining 49 per cent.
CapitaLand is also said to have bid unsuccessfully for the job to set up and manage a real estate investment trust holding a $1.71 billion portfolio of industrial properties divested by JTC Corporation.
In April this year, CapitaLand announced it had aborted its proposed investment in the properties of Russian logistics property developer Eurasia Logistics, citing challenging market conditions.
Source : Business Times - 27 Sept 2008
Loading ...
Post a Comment
Tell me a bit about yourself; who you are, where you're from, what information you would like to see on this site. As I continue to provide you with Singapore property happenings, your feedback will encourage me to post more frequently. Thank you.