CMA

CMA:(The Edge) Sets up new China fund worth $1.3b. Deutsche estimates fund gearing levels to be at loan to values of 40-50%, which would give the fund a US$1.8b – US$2b of acquisition capabilities. Grp note that given potential of China’s mkt, it needs to work with capital partners to enhance its investment capacity and expand footprint in China. Nomura estimates that with the transaction, $375m of capital is likely to be unlocked with a book gain of $71.9m. Grp’s CEo add that CMA is diff from other developers in China and are a pure-play shopping mall Company, adding that for the first time since IPO, CMA has more malls contributing to NPI than those under development, with 42 operational malls in China vs 15 being built. Analysts note that downside of operating shopping malls is their long gestation period. Although the IRR target for CMA’s Chinese malls is in the teens, investment horizon is long with valuation side comingin only after 8 yrs.