Acquisitions & Expansions
The CDL Group is on track to achieve our $5 billion target for acquisitions and to grow our funds under management (FUM) business to $5 billion by 2018 – a five year target set in 2014 as part of our accelerated diversification strategy.
A key focus of CDL’s growth strategy is to actively build our overseas platforms in our core development business, particularly in five key overseas markets – the UK, US, China, Japan and Australia, while seizing suitable opportunities in Singapore.
In 2016, the Group made three strategic overseas acquisitions, bringing our total acquisitive investments to $2.5 billion
In May 2016, CDL acquired our first office redevelopment property in the UK, Development House, in Shoreditch (north of the City of London) for £37.4 million. The existing 28,000 square feet (sq ft) six-storey office building can be potentially redeveloped into a nine-storey office building with about 90,000 sq ft, with ancillary retail space at the ground floor.
In September 2016, CDL China Limited, a wholly-owned subsidiary of the Group, invested RMB 100 million for a 20% stake in mamahome, one of China’s fastest growing online apartment rental platforms. This investment will contribute to the Group’s future long-term recurring income streams. With more than 150,000 apartment listings spanning over 20 cities in China, the platform provides online management software and other value added services including housekeeping, renovation, 24-hour concierge and a call centre. Synergies can be shared with the Group’s properties concentrated in the key gateway cities of Shanghai, Suzhou and Chongqing.
In October 2016, the Group signed an agreement with Mitsui Fudosan Residential Co., Ltd. to acquire a 20% stake in Park Court Aoyama The Tower, a prime residential project located in the highly sought-after Aoyama district within central Tokyo. Comprising a 26-storey tower with 163 apartments and facilities, it is expected to complete in 1H 2018.
The Group has continued to remain highly acquisitive as it entered into 2017, making three new investments in Q1.
In January, the Group announced that an agreement was signed to invest RMB 72 million for a 24% stake in Distrii, a leading operator of co-working spaces in China. Distrii currently has a capacity of over 2,200 seats across ten locations in Shanghai, of which over 80% has already been taken up. It is opening five more co-working facilities – three in Shanghai, one in Beijing and one in Hangzhou in 1H 2017– bringing the total to 15 locations, with a seating capacity of 3,700. It plans to further expand in other global gateway cities. Distrii will make its first international foray by leasing more than 60,000 sq ft of space at Republic Plaza, the Group’s flagship Grade A office building in Raffles Place. This will help backfill some of the space that will be vacated by one of the Group’s anchor tenants in the building. It is expected to open in 1H 2018.
In February, the Group announced its wholly-owned subsidiary, CDL China Limited entered into an equity transfer agreement to acquire a prime Shanghai commercial project for a total transaction value of RMB 900 million. The acquisition will be made through the purchase of a 100% equity stake in Shanghai Meidao Investment Co. (Shanghai Meidao). Shanghai Meidao owns the commercial development currently known as Meidao Business Plaza in Shanghai’s fast-developing Hongqiao Central Business District.
In the same month, the Group also acquired the 1.6 acre Ransomes Wharf site in Battersea for £58 million. The site is located within the London Borough of Wandsworth, on the south bank of the River Thames, adjacent to the Albert Bridge. It is also a short distance from Battersea Park, which is one of London’s best kept riverside open spaces. The site has existing planning permission for 118 apartments including affordable homes, commercial units and car parking spaces. The residential development will comprise six residential buildings of up to 10 storeys. Site demolition works are expected to commence in Q3 2017.