Keppel unit enters joint venture with Chinese developer to manage investment properties in China

KEPPEL Land China has, through its indirect wholly-owned subsidiary Keppel Yong Da Property Management (Shanghai), entered into a joint venture (JV) with a Chinese developer to jointly manage investment properties with potential for asset enhancement initiatives (AEI) in China.

The developer, Shanghai Topchain Link Century Industrial Development (Topchain) is a company under the Topchain Group, which focuses on operating and managing urban renewal projects. The group has 19 assets with close to 700,000 square metres of gross floor area under its management in Guangzhou, Shenzhen, Hong Kong and Shanghai.

In a bourse filing on Wednesday, Keppel Corporation said that the JV company is expected to generate stable and recurring income from the management of the office and business park assets.

In addition, it will allow Keppel Land China to tap opportunities in the growing urban renewal market in China as a result of rapid urban development and land constraints in major cities. The joint venture will also offer platforms for the application of Keppel Land's smart-building solutions in China, said Keppel Corp in a statement.

The JV company will provide services such as AEI design, planning submission and construction management during the AEI stage; it will also undertake leasing and property management, including smart-office solutions during the operations stage of the properties.

The company will first provide services to some assets owned by Keppel Land China and Topchain in Shanghai, and then extend its services to properties owned by third-party owners.

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Keppel Yong Da and Topchain will subscribe for 49 per cent equity interests and 51 per cent equity interests in the JV company for RMB4.9 million (S$1.0 million) and RMB5.1 million (S$1.1 million) respectively.

Said Ben Lee, chief operating officer of Keppel Land and president of Keppel Land China: "This strategic partnership with Topchain is in line with Keppel's Vision 2030 and Keppel Land's strategy, where we seek to pursue a more asset-light business model and deliver smart and innovative urban-space solutions which are highly complementary to our core real estate business."

Keppel Land China is a wholly owned subsidiary of Keppel Land and has a diverse portfolio including residential properties, offices, retail malls, mixed-use developments and townships. It is also an investor in the government-to-government project, the SinoSingapore Tianjin Eco-City, and the developer for Keppel's eco-developments in the Eco-City.

Shares of Keppel Corp ended Wednesday at S$5.58, up S$0.13 or 2.4 per cent.