KepLand unit takes 40% stake in Nanjing project

It will pay $281m to subsidiary of Shanghai-listed Gemdale

Keppel Corp's China real estate unit is buying a 40 per cent stake in the development of a prime residential site in Nanjing for about 1.41 billion yuan (S$281.3 million).

The seller - a subsidiary of Shanghai-listed Gemdale (Group) - will retain the remaining 60 per cent of the joint venture.

It is expected that the total development cost of the 8.8 ha site will be around 5.2 billion yuan.

The plot is at the core of the Nanjing Jiangbei New Area, the only national-level zone of this nature in Jiangsu province.

It is a 15-minute drive from the Hexi central business district, a 30-minute drive from the Nanjing city centre and within five minutes' walk to a Metro Line 11 station that is expected to start operations in 2021.

The site has a permissible gross floor area of 193,139 square metres.

It is expected that the total development cost of the 8.8 ha site will be around 5.2 billion yuan. The plot is at the core of the Nanjing Jiangbei New Area, the only national-level zone of this nature in Jiangsu province.

The proposed development will comprise 1,728 units of high-rise apartments and 50 units of street-front shops. Its first phase of 787 units is expected to be launched later this year while the entire project will be completed in the second quarter of 2022.

The deal marks Keppel Land China's first foray into Nanjing and its further expansion in the Yangtze River Delta region.

Nanjing is the capital of Jiangsu and the second-largest city along the Yangtze River after Shanghai.

The consideration for the equity stake will be payable in tranches, with final payment expected to take place before the end of this year.

Keppel Land China president Ben Lee said: "Our entry into Nanjing is in line with the company's strategy to expand our presence in the Yangtze River Delta region.

"Leveraging Keppel Land's international experience and track record, as well as Gemdale Corporation's strong local knowledge and deep insight into the Nanjing market, we are confident that the new development will attract homebuyers who seek well-located, quality and thoughtfully designed homes."

The transaction is not expected to have any material impact on the earnings per share and net tangible asset per share of Keppel Corp in this financial year. Keppel Land China is a wholly-owned subsidiary of Keppel Land, the property arm of the Keppel Group.

A version of this article appeared in the print edition of The Straits Times on September 21, 2018, with the headline 'KepLand unit takes 40% stake in Nanjing project'. Print Edition | Subscribe