Vanke-Linked Firm Sells Most of Its Stake in Shanghai Mall to Singapore Wealth Fund Unit

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Shanghai Nanxiang Incity MEGA on Oct. 6, 2020. Photo: VCG

China Vanke Co. Ltd. (000002.SZ) has sold almost its entire stake in a Shanghai mall to a subsidiary of long-term business partner GIC Pte Ltd., the Singapore sovereign wealth fund, as the cash-strapped developer continues to offload assets to ease debt pressure.

Shenzhen SCPG Commercial Property Development & Management Co. Ltd., which is wholly owned by a Vanke-linked company, on June 7 sold a 48% stake in Shanghai Xingxinman Enterprise Management Co. Ltd. to Reco Yiyuan Private Ltd., a GIC subsidiary, according to business data provider Qichacha.

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China Vanke sold a 48% stake in Shanghai Xingxinman, primarily managing the Shanghai Nanxiang Incity MEGA, to GIC's subsidiary, Reco Yiyuan.
The Shanghai Nanxiang Incity MEGA mall, a major asset generating significant revenue for Vanke, had a 99% occupancy rate by mid-2023.
Vanke is offloading assets, including stakes in Nanxiang Incity MEGA and Qibao Vanke Plaza, to repay debts and avoid defaults amid China's property market slump.

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Who’s Who

China Vanke Co. Ltd.: China Vanke Co. Ltd. is a cash-strapped property developer selling assets like stakes in Shanghai malls to address debt pressures. Recently, it sold almost its entire stake in Shanghai Nanxiang Incity MEGA to GIC Pte Ltd., a long-term partner. Vanke has not defaulted on its bonds despite the ongoing property market slump and has significant debts maturing soon.

Shenzhen SCPG Commercial Property Development & Management Co. Ltd.: Shenzhen SCPG Commercial Property Development & Management Co. Ltd. is wholly owned by a Vanke-linked company. It sold a 48% stake in Shanghai Xingxinman Enterprise Management Co. Ltd. to Reco Yiyuan Private Ltd., a GIC subsidiary, but retained a 2% stake. SCPG is likely to continue managing Shanghai Nanxiang Incity MEGA mall post-sale.

Shanghai Xingxinman Enterprise Management Co. Ltd.: Shanghai Xingxinman Enterprise Management Co. Ltd. manages Shanghai Nanxiang Incity MEGA, a 336,900-square-meter commercial complex. Reco Yiyuan Private Ltd., a GIC subsidiary, recently purchased a 48% stake, increasing its shareholding to 98%, while Vanke's Shenzhen SCPG retains 2%. The mall, opened in 2020, generated approximately 330 million yuan in annual revenue and had a 99% occupancy rate by mid-2023.

Reco Yiyuan Private Ltd.: Reco Yiyuan Private Ltd. is a subsidiary of GIC Pte Ltd., the Singapore sovereign wealth fund. It recently expanded its stake in Shanghai Xingxinman Enterprise Management Co. Ltd. to 98% by acquiring a 48% stake from Shenzhen SCPG Commercial Property Development & Management Co. Ltd. The key asset under Xingxinman is the Shanghai Nanxiang Incity MEGA mall, which Vanke developed in partnership with GIC.

Shanghai Nanxiang Incity MEGA: Shanghai Nanxiang Incity MEGA is a 336,900-square-meter commercial complex and major revenue contributor developed by Vanke in partnership with GIC. Opened in 2020, it generated around 330 million yuan in revenue in both 2021 and 2022, ranking third among Vanke’s projects. By June 2023, it had a 99% occupancy rate and generated 193 million yuan in the first half of the year.

Shanghai Qibao Vanke Plaza: Shanghai Qibao Vanke Plaza is a commercial project developed by Vanke. It was sold earlier this year at a discount of around 26% on its appraised value to raise cash and avoid debt default. In the first half of 2023, it generated more revenue than any other operational project by Vanke.

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What Happened When

2020：: Shanghai Nanxiang Incity MEGA opened.

2021：: Shanghai Nanxiang Incity MEGA generated roughly 330 million yuan in revenue.

2022：: Shanghai Nanxiang Incity MEGA generated roughly 329 million yuan in revenue.

First half of 2023：: Shanghai Nanxiang Incity MEGA generated 193 million yuan of revenue.

By the end of June 2023：: The mall had a 99% occupancy rate.

Earlier in 2024：: Vanke sold its entire stake in Qibao Vanke Plaza.

June 7, 2024：: Shenzhen SCPG Commercial Property Development & Management Co. Ltd. sold a 48% stake in Shanghai Xingxinman Enterprise Management Co. Ltd. to Reco Yiyuan Private Ltd.

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