CDL invests $1.1b in Chinese real estate firm Sincere Property Group

The firm will indirectly hold a 24% stake in Sincere.

City Developments Limited (CDL) has entered into agreements to invest in Sincere Property
Group, a real estate developer in China, for a total of $1.1b (RMB5.5b).

These investments are expected to be fully completed by Q4 2019. CDL will then indirectly hold an approximately 24% effective equity stake in Sincere via its offshore investment vehicle.

In addition, CDL has also entered into an agreement with Sincere to acquire a 70% stake in a commercial property, Shanghai Hongqiao Sincere Centre (Phase 2), for $247m (RMB1.2b). This investment is expected to be completed by Q3 2019.

“Rapid urbanisation, economic growth and rising disposable incomes will continue to drive demand for real estate in China. This transformational deal is CDL’s single largest investment in China to date,” said Sherman Kwek, CDL’s group CEO.

The deal will expand CDL’s presence in China from three to 20 cities and increase the firm’s portfolio allocation in China from 9% (as at 31 December 2018) to 15% (post acquisition). It may also attract potential joint venture (JV) opportunities for acquisitions in China’s Tier 1 and Tier 2 cities.