Keppel Land China is buying another completed commercial property in Beijing's Haidian district through its acquisition of Beijing Shunxiangren Enterprise Management Co for around 178.6 million yuan (S$35 million).

The property is Shangdi Neo, a five-storey development indirectly owned by Beijing Shunxiangren, Keppel Corp said yesterday in a regulatory announcement.

Shangdi Neo is located in Shangdi Information Industry Park, which is part of the expanded Zhongguancun, in Beijing's Haidian district, also known as China's Silicon Valley.

It offers 4,241 sq m of net leasable area, and will be fully occupied by sole tenant Distrii, an operator of smart, modern working spaces in China and Singapore. This is upon completion of upgrading work.

The property's acquisition will see Keppel Land China's subsidiary, Beijing Keppel Hong Hui Management Co, entering an equity transfer agreement with vendors Ningbo Jiasheng Yuecheng Investment Management Centre and Beijing Hanhe Investment Management Co, which respectively own 99 per cent and 1 per cent of Beijing Shunxiangren.

Subject to completion adjustments, around 20.9 million yuan will be paid to the vendors for the 100 per cent equity acquisition of Beijing Shunxiangren. This will be paid in two tranches and is expected to take place in the fourth quarter of this year. The remaining sum of about 157.7 million yuan will be extended as a loan to Beijing Shunxiangren to repay its outstanding debts.

Keppel Corp said the transaction is not expected to have a material impact on its net tangible assets per share or earnings per share for the current financial year.

Keppel Land China president Ben Lee said the company will continue its strategy to grow its commercial portfolio in China, with a focus on high-growth cities such as Beijing.

"With the low vacancy rate of offices in Zhongguancun, which stood at 1.5 per cent as of end-2018, coupled with rapid growth of the technology sector, we are confident that our commercial development will meet the strong demand for quality office space in the Zhongguancun area," he said.

Keppel Land China spent 555 million yuan in end-December last year to acquire a completed commercial property in Haidian. The property comprises nine storeys of office space covering 8,532 sq m of gross floor area, two storeys of retail space and 23 carpark spaces.

Keppel Corp shares closed yesterday at $5.80, down four cents or 0.7 per cent.