Global property group CDL has acquired a 51.01% stake in China鈥檚 Chongqing-based Sincere Property for RMB4.39bn (鈧�570m).
CDL has also negotiated a call option, giving it the right to an additional 9% of Sincere Property for RMB770m by 2022.
Singapore-listed CDL said it had achieved an 鈥渁ttractive鈥� entry valuation to Sincere Property of RMB8.60bn, a near-50% discount to the company鈥檚 unaudited net asset value of RMB16.48bn for its 2019 financial year.
鈥淕iven the adverse impact of the COVID-19 crisis and global uncertainty, CDL has taken the opportunity to negotiate new terms for its investment into Sincere Property,鈥� CDL said, describing the new investment terms as 鈥渟ignificantly improved鈥� over those announced last year.
Sherman Kwek, CDL鈥檚 CEO, said that while there were challenges and uncertainties caused by the COVID-19 pandemic, China remained one of CDL鈥檚 key overseas markets.
鈥淒espite our relatively late entry into China鈥檚 real estate market only a decade ago, it will immediately accelerate CDL鈥檚 geographical presence from three to 18 cities in China.鈥�
Wu Xu, Sincere Property鈥檚 chairman and founder, will see his stake reduce from 60% to 29%, while Greenland Holdings Group Co, a developer in China, will see its shareholding in Sincere Property decrease from 40% to 19.99%.
Wu, who founded Sincere Property more than two decades ago, will stay on with the company. His new role will be to focus on 鈥渁greed-upon priorities, such as capital management and portfolio recalibration initiatives to strengthen Sincere Property鈥檚 financial position and fundamentals鈥�.
Sincere Property has a pipeline of 64 development projects, 27 investment properties and a landbank of 9.2m sqm of gross floor area, mostly located in China鈥檚 first-tier and second-tier cities.
CDL has a global network spanning 106 locations in 29 countries and regions. Its global portfolio includes the Millennium & Copthorne Hotels brand, which operates 156 hotels worldwide.
