SINGAPORE (Dec 19): CapitaLand announced that its wholly-owned business unit, CapitaLand China, is acquiring Shanghai Mingchang Properties (SHMC) for RMB838 million ($171 million).

SHMC owns a commercial site in Wujiaochang decentralised business district (DBD) in Shanghai, China. The site is located next to CapitaLand's Innov Center, which was acquired in June.

This is the group’s second investment in Shanghai’s office market in six months, and rides on the strong leasing momentum of Innov Center.

The site will be developed into a Grade A office with a total gross floor area (GFA) of 37,765 sqm.

On a completed basis, the total investment for the new office, including land cost, will be about RMB1.3 billion. Construction is scheduled to begin in early 2018.

Upon completion, which is scheduled to be in 2020, the site will be the only new Grade A supply in Wujiaochang.

The combined GFA of the two office developments will amount to 118,466 sqm.

Including this new office, CapitaLand owns and manages 19 commercial properties in Shanghai.

Lucas Loh, CEO of CapitaLand China says, “Shanghai’s decentralised business districts have been witnessing strong demand from companies keen to locate in Shanghai but away from the increasingly crowded city centre. Bolstered by the strong demand, Innov Center is already about 40% leased in just six months since our acquisition. We are confident that the new office, which enjoys synergy as an extension to Innov Center, will sustain the leasing momentum.”

Shares in CapitaLand closed at $3.51 on Tuesday.

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