CITY Developments Ltd (CDL), together with its partner in China, Lianfa Group, have been awarded the tender for a mixed-use development site in the Xintiandi area of Shanghai’s Huangpu district.
The tender for the 27,994 square metre (sq m) site was awarded for 8.9 billion yuan (S$1.7 billion), or 117,542 yuan per sq m per plot ratio, CDL said in a bourse filing on Friday (Nov 1).
CDL’s subsidiary, Chenghong Shanghai, holds a 51 per cent stake in the joint-venture acquisition, which amounts to 4.6 billion yuan, while the remainder is held by a wholly owned subsidiary of Lianfa Group.
The investment is expected to raise the company’s pro-forma net gearing by 3.3 per cent to 72.5 per cent. Post-investment, 14 per cent of the company’s total assets will be in China.
“As an important urban renewal project, a rigorous government selection process was implemented to evaluate each tender submission based on the design proposal, developer’s overall profile and bid price, which accounts for a different weightage in the government’s rating,” the company said.
CDL said that the mixed-use site comprises two plots of land separated by a public road in the middle. Both sites have a total permissible gross floor area (GFA) of 76,027 sq m, and will be integrated via a basement that runs under the public road. The site can yield up to 77 per cent of the GFA for residential use, with at least 19 per cent allocated for commercial purposes and 4 per cent designated for public amenities.
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Land tenure
The residential segment will have a land tenure of 70 years, while the commercial segment will be 40-year leasehold.
The company said that the preliminary design factors in 102 high-rise residential units, 92 luxury villas, a 100-room boutique hotel and over 5,000 sq m of retail space.
Construction is expected to begin in the fourth quarter of 2025, and is estimated to be completed by 2030.
CDL noted that residential sales in central Shanghai have remained strong this year despite challenges in China’s real estate sector.
“Several projects launched this year in Huangpu, Xuhui and Pudong Districts were oversubscribed and fully or nearly sold out within one day, including the high-rise residential units of two projects in the vicinity launched in March and September 2024, which have average prices ranging from around 172,000 yuan to 210,000 yuan per square metre,” it said.
Policy easing
Furthermore, the company noted that Shanghai has introduced two major rounds of policy easing, including relaxing purchase restrictions, lowering payment requirements and reducing mortgage interest rates this year.
“Given the prime location and the rarity of villa products in central Shanghai, the group is confident in the demand for residential units in this project,” the company said, adding that it remains confident in the fundamentals, resilience and growth of the Chinese economy as a long-term investor in the country.
CDL shares rose 0.4 per cent or S$0.02 to S$5.22 on Friday, before the deal was announced.
