CapitaLand plans $1.5 bn project

Southeast Asia's largest developer ropes in Advance Projects, Prestige to build 15 malls.

CapitaLand, Southeast Asia's largest developer, said it will work with Advance India Projects and the Prestige Group to develop 15 malls in India with a combined asset value of more than $1.5 billion.

The projects will have a total area for lease of more than 11 million square feet, CapitaLand said in a statement to the Singapore exchange today.

The partnerships "provide CapitaLand with a headstart in the retail real estate business in both north and south India,'' Liew Mun Leong, chief executive officer of CapitaLand, said in the statement.

"We expect to deepen our retail and fund management presence in India to become a significant long-term retail real estate player there over time.''

The Singapore-based developer is expanding into a market where real estate companies raised a record $4 billion in share sales last year in an economy poised to grow at least 9 per cent for a third year.

CapitaLand said it has the "skill sets'' to boost the value of projects and sell them either through a share sale or a real estate investment trust.

CapitaLand is also expanding outside Singapore after government data show that the city-state's private home prices rose at a slower pace last quarter as measures to damp the world's fastest-rising property market take effect.

Home prices rose 6.6 per cent in the fourth quarter, after an 8.3 per cent increase in the third quarter, bringing 2007's gain to 31 per cent.

Turmoil in the financial markets, which has wiped 17 per cent off the value of Singapore's stock index this year, may further affect sentiment among home buyers, Liew said.

Shares of CapitaLand, which is expected to announce its 2007 earnings next month, have fallen 14 per cent this year.

"Anyone knows that if the capital markets are dented, there will be confidence issues, so it depends on how confidence issues are played out,'' Liew told reporters today. "In terms of financial strength, we remain the same.''