• Partnership with IE SG and UrWork
• Setting up co-working spaces
• Potential tie-ups for C31 Ventures

Forming co-working partnership with IE SG and UrWork

CapitaLand (CAPL) announced that it has signed an MOU with IE Singapore and Urwork, a leading Chinese co-working space operator, to form a partnership to help Singapore SMEs enter China. This partnership aims to provide a conducive working environment, leads and business advisory services, and smooth the market entry process into China for Singapore SMEs.

IE Singapore will identify and link potential Singapore SMEs to these co-working spaces while CapitaLand will work together with UrWork to launch co-working spaces in its Chinese and Singapore malls. These SMEs get preferential membership fees, which will allow them to access high-quality facilities at low cost and also interact with like-minded business partners.

We understand that the partnership will first launch a 4.1k sqm co-working space in CapitaMall Minzhongleyuan in Wuhan in phases starting from next month, which will be followed by a 1.3k sqm space in CapitaMall Wangjing in Beijing in the first half of next year.

To attract and groom innovative companies

As the partnership attracts and grooms companies with innovative concepts, one of CAPL’s goals is to create new investment opportunities for its venture capital arm, C31 Ventures. CAPL will explore working with these SMEs to validate their innovations across CAPL’s real estate portfolio, build a track record and scale up in China. In addition, UrWork will also include C31 Ventures in its list of preferred venture capital partners, which may also work with these companies for financing.

We see this as positive development for CAPL, together with the setting up of C31 Ventures earlier this year, as it actively future-proofs its businesses amidst sharing economy and technology trends. Looking ahead, we expect more developments in this direction as the CAPL makes a push towards digital innovation in real estate.

Maintain BUY with an unchanged fair value estimate of S$3.68.

Source: OCBC Research - 6 Dec 2016