Singapore’s CDL Wins Shanghai Site Near Xintiandi With $1.3B JV Bid

Just over three years after writing off a $1.36 billion investment in a Chongqing-based developer, Singapore’s City Developments Ltd is braving mainland China’s troubled real estate market with a joint venture project to build luxury homes, a hotel and shops in Shanghai’s Huangpu district.

CDL has teamed up with state-backed, mainland builder Lianfa Group to win a tender for a site near the Xintiandi commercial complex in central Shanghai with a bid of RMB 8.94 billion ($1.25 billion), the company said in a release. Together with its partner, the developer controlled by tycoon Kwek Leng Beng is now set to develop the 27,994 square metre (301,325 square foot) site into villas, luxury high-rise apartments, a boutique hotel and retail spaces.

SGX-listed CDL announced its Shanghai foray three years and one month after selling its stake in Chongqing-based Sincere Property Group for $1 after investing $1.36 billion in the commercial developer in less than 18 months, with the company positioning the investment as a bet on Shanghai’s resilient residential market.

“Despite challenges in China’s real estate sector, residential sales in central Shanghai have remained strong in 2024,” the company said. “Several projects launched this year in Huangpu, Xuhui and Pudong Districts were oversubscribed and fully or nearly sold out within one day, including the high-rise residential units of two projects in the vicinity launched in March and September 2024, which have average prices ranging from around RMB 172,000 to RMB 210,000 ($24,149 to $29,484) per square metre.”

New Huangpu Landmark

CDL holds a 51 percent stake in the joint venture acquisition, amounting to RMB 4.56 billion, while the remaining 49 percent interest is held by Lianfa, whose ultimate controller is state-owned Xiamen C&D Group.

The development site east of Xintiandi comprises two plots of land bounded by Ji Nan and Dong Tai Roads to the west and east and Fu Xing Middle and Zhao Zhou Roads to the north and south, separated by Ji An Road in the middle. It lies within walking distance of Taipingqiao Park and about 1 kilometre (0.6 miles) from the Huaihai Road commercial belt.

The permissible gross floor area is 76,027 square metres (818,348 square feet), with the partners’ winning bid translating to RMB 117,542 ($16,500) per square metre of GFA. The site can yield up to 77 percent of the GFA for residential use, at least 19 percent for commercial purposes and 4 percent for public amenities.

Preliminary statistics released on Thursday by China Real Estate Information Corp show that the value of new homes sold by China’s top 100 developers rose more than 7 percent in October from a year earlier, marking the first year-on-year increase in housing transactions during 2024. Sales in September were down nearly 38 percent compared to the same month in 2023, before the government rolled out a fresh round of support measures.

“Since 2H 2023, the PRC government eased policies in the real estate sector,” CDL noted in its statement. “In 2024, Shanghai introduced two major rounds of policy easing, including relaxing purchase restrictions, lowering down payment requirements and reducing mortgage interest rates in end May and September, respectively. These measures have led to improved sentiment and a stabilisation of resale prices.”

Located within 200 metres of the Laoximen metro station, the project’s preliminary design calls for 102 high-rise residential units, 92 luxury villas, a 100-room boutique hotel and over 5,000 square metres of retail space, CDL said.

The developer expects construction to begin in the fourth quarter of 2025 and conclude by 2030. The sales launch for the residential component is anticipated in 2026, and the project will seek China’s Three Star green building rating.

“All residents have moved out and the site will be handed over with vacant possession,” CDL said. “To the north of one of the plots sits a Buddhist temple, which is a cultural heritage site of Huangpu district and will continue operating as usual.”

China Commitment

CDL noted that it remains a long-term investor in China, confident in the nation’s fundamentals, resilience and economic growth.

The company’s misadventure with Sincere Property Group started with the April 2020 purchase of a 51 percent stake in the troubled business park developer, which just one month earlier had defaulted on RMB 2.6 billion in bonds. Sincere went on to suffer a string of additional defaults, with CDL registering an impairment of $1.33 billion on its 2020 books based on its investment in the mainland company.

CDL’s difficulties with that investment led to the departure of four directors from its board, including Kwek Leng Beng’s cousin, Kwek Leng Peck.

CDL noted that since entering China in 2010, it has amassed more than 5,500 residential and commercial units for sale and developed and acquired over 350,000 square metres of commercial space. Before the deal announced Friday, CDL had already tested the China market with the RMB 350 million purchase of a mixed-use site in Suzhou, west of Shanghai, during the first half of 2023.

“On the back of our acquisition in Suzhou last year, securing this prime plot of land in Shanghai helps to further replenish our residential land bank in China,” said CDL CEO Sherman Kwek. “We are honoured to partner with Lianfa Group and together, we look forward to delivering an iconic landmark that will redefine the landscape.”

In Suzhou, the Singaporean group acquired a 100 percent stake in what it described as a rare waterfront mixed-use site in the city’s High-Speed Railway New Town. The site will be developed into a project comprising 650 premium residences, a Grade A office property, retail spaces and a 214-room luxury hotel.

Early works have commenced with an estimated completion of the residential and commercial components in 2028 and 2029 respectively, the company said.