Perennial-led JV wins tender for Yunnan development with 341.5m yuan bid

PERENNIAL Real Estate Holdings, through its 45 per cent owned joint venture (JV) vehicle, Perennial HC Holdings, has won the tender to develop two plots of land next to the Kunming South High Speed Railway (HSR) in Yunnan, China, at a land tender price of 341.5 million yuan (about S$67.6 million).

The tender was awarded by the People's Government of Chenggong District, Kunming, and the investment will be funded via equity capital calls from shareholders of the JV vehicle, Perennial said.

Known as the Kunming South HSR Integrated Development, the development has a tenure of 40 years, with its commercial land use right expiring in 2058. It covers a land area of about 65,054 square metres, and has a total maximum allowable gross floor area (GFA) of about 627,600 square metres.

In a press statement on Thursday, Perennial said the tender aligns with the JV vehicle's strategy to acquire, own and develop HSR healthcare and commercial integrated developments in Tier 1 or strong Tier 2 cities and provincial capitals in China with good connectivity to transportation hubs, in a bid to serve large cities with sizeable population catchments.

The Kunming South HSR Integrated Development is expected to comprise a general hospital, eldercare apartments and commercial apartments for long term lease, as well as retail components and cluster of hotels.

The development is located about 20km from the Kunming city centre, and 25km from Kunming Changshui International Airport.

Perennial added that the above transaction is not expected to have any material impact on the net tangible assets, or earnings per share of the company for the current financial year.

Perennial shares closed down 4.8 per cent, or three Singapore cents to S$0.60 apiece on Wednesday.