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CDL China enters into strategic partnership with China Vanke

  • To jointly develop and manage CDL China’s two Chongqing projects
  • Partial divestment of two Chongqing projects to Vanke for approximately RMB 986 million
  • Continues to retain equity stake in the two projects for future upside
  • To tap on Vanke’s networks and development capabilities for future expansion in China

The 126-unit Eling Residences is one of the two CDL China projects in Chongqing that has been partially divested to China Vanke, as part of a strategic partnership.

Singapore, 2 November 2017 – City Developments Limited’s (CDL) wholly-owned subsidiary, CDL China Limited (CDL China) has entered into a strategic partnership with China Vanke Co., Ltd (Vanke), one of China’s leading real estate developers, through a partial divestment of CDL China’s interests in two projects located in the Yuzhong District of Chongqing. CDL China partially divested 70% of Chongqing Huang Huayuan and 50% of Eling Residences to a subsidiary of Vanke, Chongqing Longdao Industry Co., Ltd, for an aggregate consideration of approximately RMB 986 million (equivalent to approximately S$202 million). The Transaction Cooperation Agreement was inked in September. The final effective completion of the divestment is subject to the fulfilment of certain conditions expected in December 2017.

Following the partial divestment, CDL China continues to retain a 30% and 50% equity stake in Chongqing Huang Huayuan and Eling Residences respectively for future upside. The strategic partnership will see both projects being jointly developed and managed by CDL China and Vanke.

Chongqing Huang Huayuan is a mixed development which sits on a site area of 23,512 square metres with total gross floor area (GFA) of approximately 121,151 square metres. The prime site is centrally located in the Yuzhong District between the two core central business districts of Jiefangbei and Jiangbeizui, with views of the Jialing River and Jiangbeizhui city. The design of the development is currently under review by the joint venture (JV) entity.

Eling Residences is now a completed 126-unit luxury residential development designed by internationally renowned architect Moshe Safdie with a total GFA of approximately 35,486 square metres. Positioned at the peak of Eling Hill in the Yuzhong District, Eling Residences’ prime location offers panoramic views of the Yangtze and Jialing Rivers. Going forward, the JV entity will manage the sales and marketing efforts for the project.

Mr Mark Yip, Chief Executive Officer of CDL China said, “As part of CDL’s diversification, China is one of the Group’s key overseas markets. Since CDL China was established in 2010, we have acquired prime sites in the major growth cities of Chongqing, Shanghai and Suzhou. This cooperation agreement with Vanke marks the start of our strategic partnership with one of China’s leading real estate developers. We hope to tap on Vanke’s extensive local experience and expertise, business networks and development capabilities in China for the two prime Chongqing projects. CDL will also contribute our international knowledge, best practices and networks to further enhance the projects’ positioning, design and sales channels, creating a win-win alliance with Vanke. This CDL-Vanke partnership will pave the way for future collaborations and business expansion opportunities in both China and Singapore.”

“This partial divestment is in line with CDL’s strategy of recycling capital for our expansion plans. We are actively exploring new acquisitions and investments to grow our presence in China,” Mr Yip added.

The partial divestment is not expected to have any material impact on the net tangible assets or earnings of the CDL Group for the financial year ending 31 December 2017.