Keppel Land China secures S$376mln Chengdu prime residential sites

New acquisitions reflect continuous focus and seizing of opportunities to grow China portfolio.

Leveraging its strong track record and relationships in fast-growing Chengdu, Keppel Land China, through a wholly-owned subsidiary of the Keppel Land Group, Hillwest Pte Ltd, has secured two prime sites at Jinjiang District and Xinjin County for RMB 1.21 billion (S$249 million) and RMB 617 million (S$127 million) respectively in the Sichuan capital for residential development.

The first is a 5.1 hectare (ha) city site located along the Second Ring Road in Panchenggang, Jinjiang District. Situated in a prime location with high connectivity, the site is also in close proximity to Dongdajie, Chengdu's financial street, as well as to shopping landmarks, the metro station and renowned schools. The proposed development is envisioned to provide about 1,630 high-rise apartments, according to a Keppel report.

The second acquisition is for two separate sites with a combined land area of 25 ha, located along the same street in Mumashan, Xinjin County. The sites are in close proximity to the Tianfu New City, which is poised to be Chengdu's software town and the future Central Business District with supporting lifestyle amenities. The two sites will be jointly marketed as a 250-unit villa development.

Targeted at the upper-middle income segment, both developments are expected to launch their first phases in 1H 2012.

"The latest acquisitions are in line with our strategy to further strengthen our focus in China. Since 2002, Keppel Land has built up a strong reputation for its quality homes in Chengdu. We are confident that the homes in these two prime sites will be much anticipated and will meet the surging demand brought about by Chengdu's fast-track economic growth.

"Chengdu's growth is well supported by strong fundamentals, increased foreign investments and rising affluence amidst a burgeoning population. These favourable conditions, coupled with a limited supply of prime sites in the city, augur well for our projects," said Mr Ang Wee Gee, Executive Vice Chairman of Keppel Land China.
Sichuan has been building up its reputation as a key investment zone in Western China. Its economy is considered an essential growth engine for the region as it continues to reap benefits from the "Go-West" policy initiated by the government in 2000.

In the first half of 2010, Chengdu's GDP increased by 16.8 %, higher than the national GDP growth of 11.1%. Chengdu's urban disposable income per capita has also risen steadily by 13.9% to reach RMB 10,714 in the first half of 2010. US business magazine Forbes also recently ranked Chengdu as the one of the top ten fastest growing cities in the next decade.

Currently, Keppel Land has two developments in Chengdu, which is the first second-tier city the Company entered into. The Waterfront, a 1,143-unit condominium development, is already fully sold. The Botanica, which is jointly developed with Surbana Land, has successfully sold more than 5,000 units over five phases since 2005. When fully completed, there will be about 9,400 homes supported by amenities such as schools, clubhouses, a market and recreational facilities.

In China, Keppel Land has a total GFA of 5.3 million square metres which translates to more than 40,000 homes in township, residential and waterfront developments across 10 cities. To date, more than 14,000 homes have been sold.

As at 1H 2010, over 18% or S$1.2 billion of Keppel Land's total assets is invested in China and 28% of the Company's net profit is derived from its operations there.

Keppel Land is also an investor as well as developer cum project manager for the Keppel development in the landmark Singapore-China government project, the Sino-Singapore Tianjin Eco-City.

Apart from property, Keppel's Infrastructure Division has also developed strong presence and relationships with partners in Sichuan, where Keppel Integrated Engineering is providing technology for a waste-to-energy plant in Chengdu.

Keppel is also part of a Temasek Holdings-initiated consortium which will soon begin a feasibility study for an innovation park with the Chengdu High-Tech Zone Investment Group.

The above transaction is not expected to have any significant impact on the net tangible asset per share or earnings per share of the Keppel Land Group for the financial year ending 31 December 2010.