Keppel Land Ltd and China Vanke Co will undertake a condominium development in Tanah Merah as part of a strategic partnership that will see both companies jointly develop properties in Singapore and China.
This first joint venture will see Wkdeveloper sig I Private Limited, a wholly owned subsidiary of Vanke, acquire a 30 per cent stake from Keppel Land for $135.5 million.
The 3.2 hectare site in Tanah Merah, which will yield 726 condominium units, was awarded to Keppel Land's Sherwood Development Pte Ltd for $434.55 million in October last year.
Led by Keppel Land, design development for the project is underway. The project is expected to be launched in the second half of this year.
Ang Wee Gee, chief executive officer of Keppel Land, said: "Leveraging Vanke's deep insight and keen knowledge of the Chinese market, this win-win partnership will put us in good stead as we look towards scaling up in high-growth cities in China."
Following China Vanke's acquisition of a 75 per cent stake in Hong-Kong listed Windsor Properties Holding, which was renamed Vanke Property (Overseas), Vanke is part of a wave of Chinese developers venturing overseas.
The biggest developer listed on Chinese exchanges marked its first foray into the US real estate market earlier this year.
In February, Vanke bought 70 per cent of 201 Folsom Street, a mainly high-end residential project in San Francisco, said Jinsong Du, a Hong Kong-based property analyst at Credit Suisse Group AG, in a note to clients on Feb 12, citing information from Vanke.
The development will comprise about 669 residential units, according to Credit Suisse.
The deal is Vanke's first outside Asia.
Yu Liang, president of Vanke, said: "Vanke looks forward to this long-term partnership with Keppel Land, one of Asia's leading property developers. We hope to be able to learn best practices from Keppel Land in the area of real estate development.
"We are confident that our first joint development project in Tanah Merah will set the pace for future collaborations in Singapore and China."
The above transactions are not expected to have any material impact on the net tangible asset per share or earnings per share of Keppel Land for the current financial year.
Keppel Land shares closed down two cents at $3.97 yesterday, before the announcement was made.
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