City Developments acquires majority stake in Shenzen Tech Park

It has entered into an agreement with Chinese-based Sincere Property Group and two entities of China Ping An.

City Developments Limited (CDL) has acquired 84.6% equity interest in Shenzhen Tusincere Technology Park Development Co. Litd. for approximately $174m.

Shenzhen Tusincere, in turn, has 65% equity interest in the Shenzhen Longgang Tusincere Tech Park project, with an estimated value of $1.8b, according to independent valuer Cushman & Wakefield. The remaining 35% equity interest is held by a state-owned corporation.

In all, this grants CDL a 55% effective interest in the technological park project.

“In executing this asset acquisition the CDL working group is accelerating efforts to implement the restructuring of Sincere Property. Our focus is to improve liquidity while limiting any additional financial exposure by CDL to the investment in Sincere Property,” CDL Executive Chairman Kwek Leng Beng said.

CDL's total investment in Sincere Property is at $1.8 billion, and has not provided further liquidity support to the Chinese firm since.

Located near the Shenzhen-Hong Kong International Centre, the property for the technological park spans more than 192,000 square meters and has a scalable gross floor area of more than 413,000 square meters.

Approximately 70% of the area will be developed for offices, 20% for SOHO apartments, and 10% for parking. The first phase of construction is complete. The second and third phases are expected to be completed in April 2022. The fourth and last phase of the construction has yet to be initiated.

Pre-sales of units from the first three phases of construction have reached approximately $1.4b as of 31 December 2020.

Shares of CDL traded flat at $7.20 per unit on 22 February, a mere $0.06 higher than last week's close.