A unit of City Developments (CDL) has tied up with one of China's leading developers through a partial divestment of the unit's interests in two projects in Chongqing.
The agreement involves CDL China partially divesting 70 per cent of Chongqing Huang Huayuan and 50 per cent of Eling Residences to a China Vanke subsidiary for 986 million yuan (S$203 million).
Both projects will now be jointly developed and managed by CDL China and China Vanke.
CDL said the agreement was inked in September while the final divestment is subject to fulfilment of certain conditions expected next month.
Following the divestment, CDL China will retain a 30 per cent stake in Chongqing Huang Huayuan and 50 per cent of Eling Residences for "future upside".
"This partial divestment is in line with CDL's strategy of recycling capital for our expansion plans. We are actively exploring new acquisitions and investments to grow our presence in China," said CDL China chief executive Mark Yip.
Chongqing Huang Huayuan is a mixed development on 23,512 sq m with a total gross floor area (GFA) of about 121,151 sq m. It is centrally located in Yuzhong district with views of Jialing River and Jiangbeizhui city.
Eling Residences is a completed 126-unit luxury residential development designed by internationally renowned architect Moshe Safdie, with a total GFA of about 35,486 sq m.
Located at the peak of Eling Hill in Yuzhong district, Eling Residences offers panoramic views of Yangtze River and Jialing River. The joint-venture entity will manage the sales and marketing efforts for the project.
CDL said the partial divestment is not expected to have any material impact on its net tangible assets or earnings for the financial year ending Dec 31.
CDL shares closed 17 cents or 1.3 per cent down at $12.79 yesterday.
The announcement was made after the market closed.