JOHANNESBURG (AFP) - Hong Kong property firm Shanghai Zendai took its first venture into the African market on Tuesday with a multi-million dollar deal to develop a suburb of Johannesburg, South Africa's commercial hub.
Shanghai Zendai purchased a 1,600 ha parcel of land in the eastern Johannesburg suburb of Modderfontein for US$104 million (S$129 million) and plans to redevelop it over the next 15 years into a commercial, residential and light industry hub.
The firm said it selected the plot due to its strategic location between the city's airport and Sandton City financial district, known as the richest square mile in Africa.
"We're looking forward to being part of Africa's emerging success story for many years to come," said Shanghai Zendai's chairman Dai Zhikang in a statement.
The Hong Kong Stock Exchange-listed firm purchased the property from AECI Ltd. The area currently houses an explosives factory that opened in the late 1890s to support the gold mines around the city.
The company's investment is a "strong expression of confidence in the local real estate", it said, pledging to stay true to South African architectural aesthetics while embracing the latest green technology.
"It's also a stepping stone should we choose to grow our footprint in South Africa and the rest of Africa," added Mr Dai.
A recent independent study showed that a previously approved spatial development plan for the area, would cost roughly US$7.5 billion with a capacity to construct at least 33,000 houses.
Founded 20 years ago, Shanghai Zendai is a private conglomerate involved in equity investment, asset management and real-estate.
It has developed hotels, offices and houses in 12 Chinese cities. Its first overseas project was in 2011 near Auckland in New Zealand.