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Perennial sets up US$1.2 billion JV to invest in healthcare developments in China

SINGAPORE-LISTED Perennial Real Estate Holdings, together with partners, has set up a US$1.2 billion joint venture (JV) vehicle that would acquire and develop large scale and predominantly healthcare integrated mixed-use developments connected to the high speed railway (HSR) stations in China.

The group on Wednesday said the first close of the total funds secured to the JV vehicle, Perennial HC Holdings, amounts to US$500 million.

Pua Seck Guan, chief executive of Perennial, said: "Perennial currently has two existing HSR projects in Chengdu and Xi'an. With the establishment of this US$1.2 billion JV vehicle, we are excited about the potential to grow our HSR portfolio to up to eight projects with a total gross floor area (GFA) of over four million square metres (sqm), positioning Perennial as a leading player with the largest HSR portfolio."

Through its subsidiary, Perennial will hold a 45 per cent stake in its first JV, in which it contributed US$225 million for the first closing. This is to be funded in stages upon capital call through internal cash and/or bank borrowings.

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The remaining stakes are to be held by a Perennial-syndicated consortium of partners - a subsidiary of Hong Kong-listed Shun Tak Holdings owns a 30 per cent stake; Bangkok Bank Public Company holds 10 per cent, Singapore-listed BreadTalk Group's subsidiary owns five per cent; an investment vehicle of Kuok Khoon Hong - one of Perennial's core sponsors and Perennial's chairman - and S1F Pte Ltd each has a four per cent stake, and Wilmar International's subsidiary with a two per cent share.

"Positioned as one-stop regional healthcare hubs, the HSR healthcare integrated mixed-use developments, typically measuring between 300,000 sqm to 800,000 sqm in total GFA, are expected to host healthcare real estate featuring core medical/healthcare facilities, including various types of specialised hospital, such as international general hospital, international women's and children's hospital, international geriatric hospital and international rehabilitation hospital, as well as medical centres, eldercare homes and nursing homes," Perennial said.

It added that there will be complementary medical and healthcare-related services, including diagnostic centres, pharmacies and genomic laboratories.

The JV will target HSR healthcare integrated mixed-use developments opportunities in tier one or strong tier two cities and provincial capitals in China with close proximity to transportation hubs, particularly HSR stations.

These developments are expected to comprise other real estate components such as hotels, retail, serviced apartments, offices, and will support various communities, including residents of the city and from other cities within the province, among others.

In line with the deal, Perennial and Shun Tak will set-up an asset and project management company, as well as a hotel management company to manage the asset, project and hotel management aspects of the HSR healthcare integrated mixed-use developments.

Perennial's wholly owned subsidiary will be appointed as the property manager of the mixed-use developments.