CDL buys controlling stake in China-based Sincere Property for $885m

This will provide the company with a portfolio of 27 investment properties.

City Developments (CDL) inked a deal to buy a 51.01% joint controlling interest in China-based developer Sincere Property Group for an initial investment of $885.75m (RMB4.39b), according to a press release.

Part of this investment quantum will be utilised to repay the $554.6m (RMB2.75b) loan extended by CDL to Sincere Property. Upon completion, CDL will hold a joint controlling interest in Sincere Property via an offshore investment vehicle.

The investment will provide CDL an expanded geographical presence of 18 cities across China, a pipeline of 64 development projects and a portfolio of 27 investment properties.

A call option will also be granted to CDL to purchase an additional 9% effective interest in Sincere Property for $155.29m (RMB770m) at the same entry valuation. The call option can be made at CDL’s discretion during a six-month period on either 18 months after the completion of this transaction or 1 July 2022, whichever is later.

In May 2019, CDL expressed plans to invest $1.10b (RMB5.5b) to acquire a 24% stake in Sincere Property by Q4. However, this was not completed, so CDL had instead extended the initial tranche of (RMB2.75b) as an interest-bearing loan.