CapitaLand Limited acquires mixed Shanghai site for S$397.5m

Buys 70% stake in Shanghai property firm.

CapitaLand (CAPL) announced that it has paid RMB1.95b (S$397.5m) for a 70% stake in Shanghai Guang Chuan Property Co. Ltd, which owns a prime site in Hanzhonglu, Zhabei District, Shanghai, according to OCBC Investment Research.

The 25.4k sqm site has a total GFA of 110k sqm (105k sqm GFA above ground comprising 75k of office and retail space and 30k sqm residential) and is located within a 15-min drive from the Shanghai CBD. The project is expected to begin construction in 2015 and complete by 2017. The price paid translates to an acquisition cost of RMB25.3k per sqm, which OCBC believes is "a fairly reasonable level" for this site.

The completion of the acquisition is subject to the approval from PRC authorities and is expected to take place by 2Q14.