Funding set for Phase 2 of Beijing project

PHOTO: Funding set for Phase 2 of Beijing project

Funding has been lined up by investors, including those from Singapore, for the second phase of an ambitious $2.6 billion project being built by Beijing's famous Grand Canal.

Perennial Real Estate Holdings announced on Tuesday that it has syndicated a second consortium with a $474 million equity fund that will develop part of the Beijing Tongzhou Integrated Development.

Investors include Hong Kong-listed Shun Tak Holdings, Singapore's BreadTalk Group and Bright Assets Enterprises - an entity controlled by Mr Wong Fong Fui, the chairman and group chief executive of Boustead Singapore.

Osim chief executive Ron Sim and Mr Ronald Ooi, an adviser to Maybank Kim Eng Securities, are also part of the group.

Together with Perennial's stake, these investors make up Perennial Tongzhou Holdings, which owns a 50 per cent interest in Phase 2. The rest is held by Beijing Mei Rong Jia Investment, a unit of a Beijing-based property developer.

The project, which had been inspired by Singapore's Marina Bay, is being built in Tongzhou, Beijing's new central business district, and will have direct access to the riverside promenade or boardwalk.

It comprises two phases and will eventually cost $2.6 billion to develop. This includes the cost of the land.

Last October, Perennial syndicated a consortium with a $500 million equity fund for the first phase.

This comprises three sites with a total land area of about 79,000 sq m and a potential development gross floor area (GFA) of about 402,000 sq m. It will comprise retail, office and homes.

Phase 2, which will also have retail space, offices and homes, will be built on three adjacent sites totalling 104,000 sq m and have a GFA of 426,000 sq m.

Both phases are slated to be completed in 2016.

They front the Beijing-Hangzhou Yun River, commonly known as the Grand Canal.

The development is expected to comprise a large-scale mall catering to middle- to upper-middle-income shoppers.

Similar to Phase 1, Perennial Real Estate Holdings - as the sponsor of Perennial China Retail Trust - has also secured the right of first refusal to acquire the block retail component of Phase 2 for the trust.

"The Grade A offices will provide local enterprises, foreign and local financial institutions and multinational corporations an ideal corporate office... The residences will offer luxury waterfront living with unobstructed views of the scenic Grand Canal," a statement by Perennial added.

The Tongzhou District in south-east Beijing is known as the capital's eastern gateway.

It is about 13km from the city centre and 16km to the airport.

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