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Keppel unit buys Shanghai commercial property for S$96.4m
KEPPEL Corp said on Friday that its subsidiary, Keppel Land China, has acquired a commercial property in Shanghai's Pudong New District in China for 493 million yuan (S$96.4 million).
Zhangjiang Micro-electronic Port Block #3 is a four-storey development with a gross floor area of about 14,518 square metres.
Upon completion of the acquisition, expected by the fourth quarter of this year, the vacated property will undergo enhancing and upgrading works to meet new market needs, Keppel Corp said in an exchange filing.
The property is located in the core area of Zhangjiang Hi-Tech Park, a premier business park in Shanghai that has been identified by the Shanghai Municipal Commission of Economy and Informatization as one of the four clusters in Shanghai for the development of the artificial intelligence (AI) industry, the company added.
The acquisition will be made via a share sale and purchase agreement (SPA) that Keppel Land China has inked with several wholly-owned subsidiaries of The9 Limited in China which collectively own the property.
The deal amount was mainly based on the agreed value of the property after the three target companies complete their debt restructuring in Oct 2019.
Payment will be made over four tranches with the deal expected to be completed by the fourth quarter of 2019.
The first tranche of 49.3 million yuan will be paid into an escrow account when the SPA is signed, and a second 320.5 million yuan tranche will be deposited into the escrow account when the equity transfer begins.
The first two tranches' monies will be progressively released to the sellers from the escrow account upon completion of agreed milestones during the equity transfer process.
A third payment of 74 million yuan is due when the handover is complete and a final tranche of 49.3 million yuan will be paid two months after the handover's completion.
The deal is not expected to have any material impact on the net tangible assets per share or earnings per share of Keppel Corp for the current financial year.
Ben Lee, president of Keppel Land China, said: "Keppel Land China will continue our strategy to grow our commercial portfolio in China, with a focus on first-tier cities such as Shanghai."
The acquisition is Keppel Corp's third property investment in China for September, after buying another completed commercial property in Beijing’s Haidan district for around 178.6 million yuan and a 30 per cent stake in Win Up Global (WUG), which will ultimately own Westmin Plaza, an office and retail development in Guangzhou for HK$141.4 million (S$24.8 million).
Its shares closed up S$0.05 or 0.8 per cent to S$6.06 on Thursday.