Citigroup has issued a research report indicating that China Resources Land (01109) plans to spin off two of its shopping centers and convert them into a REIT. The move is expected to raise approximately 5.4 billion yuan. China Resources Land is anticipated to subscribe to about 20% to 30% of the REIT's equity. The bank stated that the spinoff of the two malls could enhance earnings and dividends. It believes China Resources Land has the capability to realize its plan of recycling five to six shopping centers through the REIT structure, with an estimated value of 10 billion to 15 billion yuan. Citigroup lists China Resources Land as its top sector pick, with a "Buy" rating and a target price of HK$35.8.
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