Singapore firm to package up to seven malls worth S$800m CapitaLand, Southeast Asia's largest property developer, plans to raise S$320 million (HK$1.57 billion) in an initial public offering of a China-based real estate investment trust before the end of the year, market sources said. The Singapore-based company will package six or seven retail complexes in China, with a net asset value of about S$800 million, and has filed with the Monetary Authority of Singapore. Properties developed by CapitaLand in China include Raffles City Shanghai, which has eight floors of shops and 51 storeys of grade A offices. In Tianjin, the company owns the Exchange, which has a net rentable area of 376,600 square feet, and the Huiteng Metropolis in Xiamen, which has 698,250 sqft. The reit, dubbed the China Retail Real Estate Investment Trust, is only the second such investment vehicle with mainland properties. Hong Kong-listed Guangzhou Investment raised US$230 million in Hong Kong in December last year when it packaged commercial properties in the Guangdong provincial capital in what was called the GZI Real Estate Investment Trust. Guangzhou Investment listed GZI Reit by selling units at HK$3.08 each. The share closed at HK$3.19 yesterday. The unit price has fallen 7.54 per cent so far this year. The mainland reit market has been slow to develop because of tax and valuation rules that make such deals uneconomical. New regulations in July made things even tougher when reits were required to set aside cash to pay taxes and cover depreciation costs, cutting the amount of dividends available for distribution to investors. Reits pay dividends to investors based on rental income generated from the properties owned by the trust. Property developers can also generate cash for future projects by selling their assets into a reit. CapitaLand bought a 20 per cent stake in Hong Kong's Lai Fung Holdings, which develops residential, commercial and office properties in the mainland, in March for HK$644 million as it seeks to expand in China. The company also bought the 930,000 sqft Xihuan Plaza Retail Mall in Beijing for 1.32 billion yuan from a subsidiary of state-owned Beijing Finance Street Construction Development in May. Mainland properties accounted for 19 per cent of CapitaLand's US$12 billion asset base and contributed 43 per cent of its US$33 million pretax profit for the first half of this year.