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The partnership will lead to growth opportunities in China.
Singapore’s City Developments (CDL) announced that it has made two transactions amounting to around $1 billion (S$1.37 billion) with China’s mid-tier real-estate market player Sincere Property Group, reported the Nikkei Asian Review.
CDL will buy an estimated 24 percent stake in Sincere for 5.5 billion yuan (S$994.8 million) in a deal financed by equity and loans.
“It is a rare opportunity to acquire a meaningful stake in an established platform at an attractive valuation,” said CDL Group CEO Sherman Kwek.
Additionally, CDL will spend 1.2 billion yuan (S$238.7 million) to acquire from Sincere a 70 percent stake in Shanghai Hongqiao Sincere Centre, a commercial property located in the heart of Shanghai’s Hongqiao Central Business District.
This will raise China’s share in the global portfolio of CDL to 15 percent from nine percent.
Sincere chairman Wu Xu said that the partnership will lead to growth opportunities, “such as tapping CDL’s experience and networks to jointly explore fund management activities.”
CDL is undertaking the expansion in China, believing that there is significant room for the mainland market’s development on a long-term basis.
When these transactions close by year-end, the companies’ operation will merge with the objective of developing properties located in leading mainland cities.
With trade tensions between China and US remaining a concern, Wu believes that “for the next 10 years, you will see constant and sustainable growth in the property market in China.”
“This trade war definitely has some negative repercussions on both sides of the economy. I hope this will not be a prolonged thing.” added Kwek.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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