CapitaLand sold its stakes in three Tier 2 shopping malls for RMB2.96bn to its subsidiary CapitaLand Retail China Trust (CRCT). The malls sold were: CapitaMall Xuefu (Harbin), CapitaMall Aidemengdu (Harbin) and CapitaMall Yuhuating (Changsha).

Our thoughts: The transaction price translates to a fair 6% NPI yield for an almost fully let portfolio which has seen an average tenant sales growth CAGR of 7% over the past 3 years; a healthy report card in our opinion. With retail malls trading at sub 5% yields in China’s Tier 1 cities, well-managed malls outside the major Chinse cities do present an interesting opportunity set for investors with a core-plus strategy.