Keppel Corporation and co-investors have signed a deal to acquire a commercial development in Shanghai for 4.6 billion yuan or S$916 million, according to a statement.
The deal to buy Yi Fang Tower will be done through Keppel units and follows a shareholder agreement made this month over joint-venture company North Bund Keppel, the company announced yesterday.
North Bund Keppel entered into an agreement last September with Yi Fang Jing Yi Enterprise Management to buy the property. The deal is expected to be completed in the second quarter.
After the initial round of funding through the subscription of shares, North Bund Keppel will have a paid-up capital of about US$302 million (S$408 million).
North Bund Keppel is held by a wholly owned subsidiary of a fund managed by Alpha Investment Partners, which is part of Keppel Corp.
This fund will hold 42.1 per cent of North Bund Keppel. A wholly owned unit of Keppel Landwill have a 29.8 per cent stake. The remaining 28.1 per cent shareholding will be held by other co-investors.
Yi Fang Tower, a recently completed prime office and retail project on Shanghai's Huangpu River, comprises two 18-storey office towers and a retail podium.
Its total gross leasable area of about 74,400 sq mcomprises 47,500 sq m of offices and 26,900 sq m of retail space. The building is in the centre of the North Bund area and near the Lujiazui Financial Centre and the Bund waterfront zone in the central city.
The transaction is not expected to have any material impact on the earnings per share and net tangible asset per share of Keppel Corp for this financial year, the group added.