Finance and Economics News on November 26th (Reporter: Wang Haichun), Capland Group's plan to transfer the property in the core area of Shanghai Lujiazui at a discount has attracted widespread market attention.

Capland Group is expected to sell at a loss the Shanghai Pudong Building acquired five years ago. It is currently negotiating with AEW Group's fund on related matters. Capland may sell about 70% of the Pudong Building at a price of 1.8 billion yuan. In terms of total price, the planned selling price of the above assets by Capland is equivalent to a 35% discount on the acquisition price.

Capland has denied the rumors of the transaction today, stating that the relevant information is not true.

Industry insiders believe that regarding the rumors of the transaction, Capland's denial has a large granularity of information, while the media reports on the transaction include various different levels of segmented elements.

"Bulk transactions are quite complex, involving many aspects. In the media reports, they include the planned sale of Lujiazui project's ownership, the preliminary negotiation price of the transaction, or selling at a loss; the denial from the parties is aimed at specific aspects, whether there is no plan to sell the project at all is currently not clear." said an industry professional from a property institution.

In response to the questions raised by industry professionals, journalists contacted Capland today to verify each item.

"We currently do not have more information on the issues you mentioned. What we know is the public response this morning." said a person related to Capland.

The Pufa Building, completed in 2002, is located in the core business district of shanghai lujiazui finance & trade zone development, just a street away from shanghai global financial center and Jin Mao Tower, close to Dongchang Road Station on Metro Line 2, with superior geographic location.

Public information shows that HNA Real Estate acquired part of the office area and underground property parking spaces of the Pufa Building in 2009 at a price of 1.475 billion yuan. In January 2019, Keppel Group established a joint venture with a non-related third-party company in a 50:50 partnership to acquire around 70% of the area of the Pufa Building at a price of 2.752 billion yuan.

"The transaction cycle of bulk assets is long, with many variables. Factors such as price, payment methods, etc., may all have an impact on the transaction. some deals may take a long time and due to price factors, variables may occur, but this does not mean that negotiations and discussions have not taken place; if a deal fails to materialize due to various reasons, it is not the same as the owner not making arrangements or being in contact at all." An analyst believes it is worth continuing to follow how this event will evolve.

From the perspective of Keppel, it has divested multiple projects this year.

In January this year, Capland China T (CLCT) announced the successful sale of Keppel MALL • Shuangjing Shopping Center near Dongzhimen in Beijing, for a transaction price of 0.842 billion yuan.

According to information released by the WeChat official account 'Keppel Group' on January 31 this year, Keppel Investment and AIA Life Insurance Company Limited jointly established a joint venture to restructure the capital structure of the Beijing Keppel Star Trade project. Keppel Investment sold 95% of the shares in the Beijing Keppel Star Trade project to AIA Life, retaining the remaining 5% equity, with a total transaction value of nearly 2.4 billion yuan. The project is located in the core business district of Chaoyang District. Keppel Investment acquired the project through a court auction in October 2022.

In addition, in October this year, Keppel Ascott Trust (CLAS) signed an agreement to sell the Tianjin Shengjie Olympic Tower Service Apartment to an unrelated third party. The transaction is expected to be completed in the second quarter of 2025.

At the time of transferring the equity of the aforementioned projects, Keppel is also seeking new investment opportunities in the market.

In September this year, there were reports in the market that Capland Group's Capland Investment was in contact with Fosun International, with Capland Investment potentially acquiring 20%-30% of Club Med's shares from Fosun Tourism Group at a price of hundreds of millions of euros. Fosun declined to comment on the rumors to reporters.