Cdl Jointly Acquires Mixed Use Development Site Shanghai Rmb894 Bil Chinese Partner Lianfa Group
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City Development Limited (CDL) has announced that its subsidiary, Chenghong (Shanghai) Investment, in partnership with Lianfa Group, has successfully secured the tender for a mixed-use development site in the Xintiandi area of Shanghai’s Huangpu district for RMB8.94 billion ($1.66 billion). This acquisition was made through a government land tender that took place on October 28, with the award being officially announced on November 1.
Spanning over 27,994 square metres, the site was acquired for the equivalent of $2,027 per square foot per plot ratio (psf ppr) at a cost of RMB117,542 ($21,827) per square metre per plot ratio (psm ppr). The main reason for CDL’s decision to acquire this site is due to the absence of any other residential site transfers in the prime Xintiandi area this year.
In comparison, a residential site in Jing’an District was transacted at RMB114,000 psm ppr in September this year, while another residential site in Xuhui District was transacted at RMB131,000 psm ppr in August through a normal public tender. In Singapore, the recent collective sale of Cuscaden Reserve was transacted at $2,377 psf ppr, while the Watten Estate Condominium collective sale was transacted at $1,723 psf ppr.
The Xintiandi site is a mixed-use development, consisting of two plots of land separated by a public road with a total permissible gross floor area (GFA) of 76,027 square metres. CDL has stated that the future development can potentially yield up to 77% of the GFA for residential use, with at least 19% allocated for commercial purposes and 4% designated 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, equivalent to RMB4.56 billion, in the joint venture (JV) acquisition. The remaining 49% equity interest in this JV is held by a wholly-owned subsidiary of Lianfa Group.
Sherman Kwek, CDL Group CEO, has expressed his confidence in China’s long-term growth prospects, stating that this acquisition is a testament to the group’s commitment to enhancing its presence in the dynamic and populous nation by targeting iconic placemaking opportunities in key tier 1 and tier 2 cities. He also added that this acquisition will help to replenish the group’s residential land bank in China, in addition to its previous acquisition in Suzhou last year. He further stated that CDL is honored to partner with Lianfa Group and looks forward to delivering an iconic landmark that will redefine the landscape of Xintiandi.
Rewritten:
Toa Payoh’s commercial and retail landscape is about to undergo a significant transformation as outlined in the URA Master Plan. The community of The Orie, in particular, can look forward to a more diverse selection of shopping, dining, and entertainment choices in their immediate vicinity. The ambitious plan involves the creation of new commercial hubs and the rejuvenation of current malls and shops, aiming to provide residents with convenient access to essential amenities and a more vibrant urban lifestyle. With the inclusion of The Orie CDL, this development is poised to elevate the overall experience for residents even further.
As of June 30, CDL has a net gearing of 116% based on historical cost and an interest cover ratio of two times. With its latest acquisition, the group’s net gearing including the fair value of investment properties is expected to increase by 3.3% to 72.5%. As of 1HFY2024, the group’s total assets including the fair value of investment properties and hotels stood at $33 billion, with China accounting for 10%. With the inclusion of this acquisition, the group’s pro forma segmentation is expected to increase to 14%.
Shares in CDL closed 2 cents higher or 0.39% up at $5.22 on November 1, compared to its net asset value of $10.12.