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Hongkong Land buys 31b yuan prime plot on Shanghai's West Bund
HONGKONG Land has acquired a prime 23.1 hectare mixed-use site on the West Bund of Shanghai for 31 billion Chinese yuan (S$6.2 billion), it said on Thursday.
The plot was purchased from the Chinese government via auction on Thursday.
The site will be used primarily for Grade-A office, retail, residential and hotel purposes. The term of the land use rights is 40 years for retail and hotel purposes, 50 years for office purposes, and 70 years for residential purposes, the group said.
The plot is located alongside the Huangpu River South Extension area in the Xuhui district of Shanghai, with an accountable gross floor area of 1,087,050 square metres. Approximately 24 per cent of the accountable gross floor area may be developed for sale in accordance with the land grant.
Payment for the plot will be via instalments in 2020. The group said it has sufficient liquidity to fund the land cost and does not intend to seek funding from shareholders.
It said: "The group is considering a range of funding options without recourse to shareholders, including internal resources and external funding (including, but not limited to, pre-sales, cooperation with strategic partners, and debt, subject to any applicable regulatory approvals)."
The group, which belongs to the Jardine stable of companies, added: "The acquisition provides the group with an attractive opportunity to develop and operate a commercial complex of scale in a prime location in Shanghai, the predominant commercial hub of the Chinese mainland.
"The transaction is in line with the group's longstanding strategy to acquire prime sites in key gateway cities across Asia."
Development of the land will be done in multiple phases and is expected to be completed by 2027, Hongkong Land said, adding: "Post-completion, the project is expected to provide the group with a stable stream of recurring earnings."
Singapore-listed Hongkong Land shares fell two US cents or 0.36 per cent to US$5.48 before the company called for a trading halt at 4.20pm on Thursday.