Cdl Jointly Acquires Mixed Use Development Site Shanghai Rmb894 Bil Chinese Partner Lianfa Group
SINGAPORE (Dec 02): City Development Limited (CDL) has announced that its wholly-owned subsidiary, Chenghong (Shanghai) Investment, together with its Chinese partner Lianfa Group, have successfully acquired a mixed-use development site in Shanghai’s Xintiandi area for RMB8.94 billion ($1.66 billion).The tender for the site, measuring 27,994 square metres (sqm), was awarded on November 1, following a government land tender which closed on October 28. This acquisition marks CDL’s second major land acquisition in China, after its purchase of a residential site in Suzhou last year.The site, with a cost of RMB117,542 ($21,827) per sqm per plot ratio (psm ppr), translates to a price of $2,027 per square foot per plot ratio (psf ppr). This is comparable to the price of a residential site in Jing’an District which was transacted at RMB114,000 psm per plot ratio in September this year, and another residential site in Xuhui District which was transacted at RMB131,000 psm per plot ratio in August through normal public tender.Comparatively, the Cuscaden Reserve site in Singapore was transacted at $2,377 psf ppr, and the Watten Estate Condominium collective sale at $1,723 psf ppr.The Xintiandi site is a mixed-use development site, comprising two plots of land separated by a public road, with a total permissible gross floor area (GFA) of 76,027 sqm. As per CDL’s plans, the future development will allocate up to 77% of the GFA for residential use, with at least 19% allocated for commercial purposes and 4% for public amenities. The lease for the residential portion of the site is 70 years, while that of the commercial portion is 40 years.In the joint venture (JV) acquisition, Chenghong Shanghai holds a 51% controlling stake or RMB4.56 billion, while the remaining 49% equity interest is held by a wholly-owned subsidiary of Lianfa Group.Sherman Kwek, CDL’s Group CEO, says, “The acquisition of this rare development site in Shanghai’s famous Xintiandi area reflects our confidence in China’s long-term growth prospects. By targeting iconic placemaking opportunities in key tier 1 and tier 2 cities, we are enhancing our presence in this dynamic and populous nation.”Kwek adds that the acquisition of this prime plot of land in Shanghai, combined with its acquisition of a residential site in Suzhou last year, will help to further replenish its residential land bank in China. He also expressed his gratitude for the partnership between CDL and Lianfa Group, saying that “together, we look forward to delivering an iconic landmark that will redefine the landscape.”As at June 30, CDL had a net gearing of 116% based on historical cost, and the interest cover ratio was two times. However, including the fair value of investment properties, the group reported a pro forma net gearing of 69.2% as at June 30. The acquisition is also expected to raise its pro forma net gearing by 3.3% to 72.5%.As of 1HFY2024, CDL’s total assets, including the fair value of investment properties and hotels, stood at $33 billion, with China accounting for 10%. However, with the acquisition, this pro forma segmentation in China will increase to 14%.Shares in CDL closed at $5.22, up 0.39% or 2 cents, on November 1 compared to its net asset value of $10.12. This article originally appeared in .
City Development Limited (CDL) has successfully acquired a mixed-use development site in Shanghai’s Xintiandi area through its subsidiary, Chenghong (Shanghai) Investment, and in partnership with Lianfa Group. The tender for the 27,994 square metre site closed on October 28 and was awarded to the joint venture for RMB8.94 billion ($1.66 billion).
The cost of the site works out to RMB117,542 ($21,827) per square metre per plot ratio (psm ppr), equivalent to $2,027 per square foot per plot ratio (psf ppr). This is in line with recent transactions in Shanghai, where a residential site in Jing’an District was sold for RMB114,000 psm ppr in September and another in Xuhui District for RMB131,000 psm ppr in August.
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The Xintiandi site, which comprises two plots of land separated by a public road, has a total gross floor area (GFA) of 76,027 sqm. CDL plans to allocate 77% of the GFA for residential use, 19% for commercial purposes, and 4% for public amenities. The residential portion has a lease of 70 years, while the commercial portion has a lease of 40 years.
Chenghong Shanghai holds a 51% controlling stake or RMB4.56 billion in the joint venture, with the remaining 49% held by a subsidiary of Lianfa Group. CDL Group CEO, Sherman Kwek, expresses confidence in China’s long-term growth prospects through this acquisition and the company’s focus on iconic placemaking opportunities in key cities.
The acquisition of this prime plot of land in Shanghai follows CDL’s purchase of a residential site in Suzhou last year and helps to further replenish its residential land bank in China. Kwek also acknowledges the partnership with Lianfa Group and looks forward to delivering an iconic landmark that will redefine the landscape.
As of June 30, CDL had a net gearing of 116% based on historical cost and an interest cover ratio of two times. However, including the fair value of investment properties, the group reported a pro forma net gearing of 69.2% as at June 30. The acquisition is expected to increase its pro forma net gearing by 3.3% to 72.5%. CDL’s total assets, including the fair value of investment properties and hotels, were $33 billion as of 1HFY2024, with China accounting for 10%. With the new acquisition, this pro forma segmentation in China will increase to 14%.
On November 1, shares in CDL closed at $5.22, up 0.39% or 2 cents, compared to its net asset value of $10.12. This article was originally published on .
