SINGAPORE - Keppel Corp's China real estate unit is buying a 40 per cent stake in the development of a prime residential site in Nanjing, China, for about 1.41 billion Chinese yuan (S$283 million).
Keppel Land China is buying the stake from a subsidiary of Shanghai-listed Gemdale (Group) Co, which will retain the remaining 40 per cent of the joint venture. The total development cost of the 8.8 hectare site is expected to be more than 5.2 billion yuan.
The site is located at the core of the Nanjing Jiangbei New Area, which is the only national-level new area in Jiangsu Province. It has a permissible gross floor area (GFA) of 193,139 square metres. The proposed development will comprise 1,728 units of high-rise apartments and 50 units of street-front shops.
The first phase, comprising 787 units, is expected to be launched in the fourth quarter of 2018, and the entire project will be completed in the second quarter of 2022.
The deal marks Keppel Land China's first foray into Nanjing and further expansion in the Yangtze River Delta region.
Nanjing is the provincial capital of Jiangsu, and is the second largest city along Yangtze River after Shanghai. The site is a 15-minute drive away from the Hexi central business district and 30-minute drive away from the Nanjing city centre, Keppel said. It is also within a five-minute walk to a new Metro Line 11 station, which is expected to start operation in 2021.
The consideration for the equity stake will be payable in tranches, with final payment expected to take place in the fourth quarter of 2018.
Ben Lee, President of Keppel Land China, 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 Corporation Limited for the current financial year.
Keppel Land China is a wholly-owned subsidiary of Keppel Land, the property arm of the Keppel Group.