The collaboration marks Keppel Land China’s first foray into Nanjing and further expansion in the Yangtze River Delta region.
Keppel Land China Limited (Keppel Land China) has formed a joint venture with Gemdale (Group) Co., Ltd. (Gemdale Corporation) to jointly develop an 8.8-ha prime residential site in Nanjing, China.
Keppel Land China has entered into a share purchase agreement (SPA) with Gemdale Corporation through its wholly-owned subsidiary Gemdale Corporation Nanjing Real Estate Development Co., Ltd. (Gemdale Nanjing) and the latter’s related nominee to acquire all of the shares in Eternal Commercial Limited (Eternal). Completion of the SPA is subject to the fulfilment of certain conditions and is expected to take place by 25 September 2018. Eternal holds an approximately 40% stake in Nanjing Jinsheng Real Estate Development Co., Ltd. (Nanjing Jinsheng), a project company incorporated to undertake the proposed development of the prime residential site. The remaining 60% stake is held by the Gemdale group of companies.
The aggregate consideration for the acquisition of Eternal and its 40% stake in Nanjing Jinsheng is approximately RMB1,414 million (approximately S$283 million) payable in tranches, with final payment expected to take place in 4Q 2018.
Nanjing is the provincial capital of Jiangsu, and enjoys strong economic growth with GDP growing by 8.1% to RMB 1,172 billion in 2017, the second highest in Jiangsu Province. With a population of 8.34 million, it is the second largest city along Yangtze River after Shanghai.
The site is located at the core of the Nanjing Jiangbei New Area, which is the only national-level new area in Jiangsu Province. The site 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. Phase 1, comprising 787 units, is expected to be launched in 4Q 2018 and the entire project will be completed in 2Q 2022. The estimated total development cost for the project is expected to be in excess of RMB5,200 million (approximately S$1,040 million).
Mr 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. We are glad to partner Gemdale Corporation, a leading developer in China with over 30 years of experience, to develop a prime residential site in Nanjing. 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.”
Mr Yang Kan, Chairman and General Manager of Gemdale RE East China, a subsidiary of Gemdale Corporation in charge of developments in the East China region, said, “Gemdale RE East China is always open to collaboration. We look forward very much to establishing a long-term partnership with Keppel Land China, a leading developer in Asia, and learning from Keppel’s rich experience. The new development in Nanjing Jiangbei New Area marks the beginning of our good cooperation and will lay a strong foundation for the broader collaboration between both sides in the East China region.”
The site enjoys proximity to major transport nodes with good connectivity to the Nanjing city centre. It is a 15-minute drive away from Hexi CBD and 30-minute drive away from Nanjing city centre. It is also within a 5-minute walk to a new Metro Line 11 station, which is expected to start operation in 2021.
The site is also well supported by amenities, including the upcoming Jiangbei Wonder City, a regional shopping mall, Gulou Hospital Jiangbei Branch, and Nanjing No.1 Middle School, one of the top middle schools in Nanjing.
The above 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.