Keppel to divest 35% stake from Chengdu residential development for $94 mil

The Jurong Lake District is an upcoming residential area set to become the largest commercial district in Singapore. This will be an exciting development with the Jurong Lake District Condo currently under construction to provide residents with an enjoyable lifestyle. The development will feature many amenities, including shopping malls, sports complexes, and recreation parks. In addition, the Master Plan also includes a new town centre which will become a vibrant social hub for the district. It will provide retail, entertainment, and cultural opportunities, as well as commercial offices and leisure spaces. This is set to be an amazing development, creating an ideal destination for everyone.

Keppel Corporation has agreed to divest its 35% stake in Chengdu Taixin Real Estate Development Co., Ltd. to Vanke (Chengdu) Enterprise Co., Ltd. through its real estate division. V City, a 16.7-hectare residential project in Chengdu, China, is jointly owned by Keppel and Vanke, and is the main asset of Chengdu Taixin.

Vanke will pay a cash consideration of around RMB504 million ($94 million) to Keppel for its stake in Chengdu Taixin. The amount of consideration was derived from a third-party audit firm in July and is based on the NAV, book value, and adjusted NAV as of June 30th. The consideration also takes into account completion of V City in 2020, and the selling out of all 5,399 residential units and 356 street-front shops of the development. The remainder of V City is comprised of parking lots and a market.

The monetisation of Keppel’s stake in Chengdu Taixin has so far generated cumulative profits after tax of approximately $57 million prior to the divestment. The deal is expected to be completed within 4Q2023 and is in line with Keppel’s asset monetisation plans to unlock value that can be invested in pursuing new opportunities. Since 2017, Keppel’s real estate division has monetised over $3 billion of assets in China and recognised profits of more than $1 billion.

This divestment is the latest development in Keppel’s effort to maximise returns and deliver sustainable value for shareholders. With the monetisation of assets going towards the development of new projects, Keppel is well positioned to build on its track record of successful investments and to continue generating long-term returns for its stakeholders.