CDL's China unit ties up with China Vanke through partial divestment of two projects

CITY Developments Ltd's (CDL) wholly owned CDL China has tied up with one of China's leading real estate developers through a partial divestment of CDL China's interests in two projects in the Yuzhong district of Chongqing for 986 million yuan (S$202 million).

Under the strategic partnership with China Vanke (Vanke), CDL China partially divested 70 per cent of Chongqing Huang Huayuan and 50 per cent of Eling Residences to Vanke's subsidiary. As a result, both projects will be jointly developed and managed by CDL China and Vanke.

In a statement, CDL said that the Transaction Cooperation Agreement was inked in September while the final effective completion of the divestment is subject to fulfilment of certain conditions expected in December 2017.

Following the divestment, CDL China retains a 30 per cent and 50 per cent equity stake in Chongqing Huang Huayuan and Eling Residences respectively for "future upside".

"This partial divestment is in line with CDL's strategy of recycling capital for our expansion plans. We are actively exploring new acquisitions and investments to grow our presence in China," said CDL China chief executive Mark Yip.

CDL shares fell 17 Singapore cents or 1.3 per cent to finish at S$12.79 on Thursday.