Keppel Land China, the mainland property arm of Keppel Corporation, has agreed to acquire a completed commercial property in Shanghai’s Zhangjiang High Tech Park for RMB 493 million ($69.23 million), according to an announcement by the Singapore-listed developer on Friday.
The acquisition is Keppel’s third property investment in China during September, after the company announced at the beginning of the month that it had agreed to purchase an office building in Beijing’s Zhongguancun tech hub for RMB 178.6 million ($25 million) and then signed up for a 30 percent stake in an office and retail development in Guangzhou for HK$141.4 million earlier last week.
Keppel is buying the office building in eastern Shanghai from NASDAQ-listed Chinese online game developer The9 Ltd.
Adding an Office Asset in Eastern Shanghai
Keppel Land China said in its statement that it is purchasing 100 percent of the equity in companies holding the 14,518 square metre (156,270 square foot) building known as the Zhangjiang Micro-electronic Port Block 3, as part of a drive to expand its income earning assets in China’s largest cities.
“Keppel Land China will continue our strategy to grow our commercial portfolio in China, with a focus on first-tier cities such as Shanghai,” said Keppel Land China’s president, Ben Lee. “Close on the heels of our acquisition of Shangdi Neo in Beijing in early September, we are pleased to secure another commercial property situated in one of China’s technology innovation hubs. We are confident that it will meet the strong demand of high-tech enterprises in the fast-developing Zhangjiang business park.”
At the agreed transaction price, Keppel Land China is paying the equivalent of RMB 33,958 per square metre for the office asset.
The four-storey development is located about 570 meters from the Zhangjiang Hi-Tech Park Station on Shanghai’s metro line two, and once the acquisition is complete, which is expected to occur in the fourth quarter of this year, Keppel expects to get to work renovating the property.
Currently vacant, the company indicated that it expects to undertake enhancements and upgrades that will bring the commercial asset up to current market standards.
Zhangjiang Micro-electronic Port is part of Shanghai’s Zhangjiang Hi-Tech Park, an economic development zone in Pudong district identified by the Shanghai Municipal Commission of Economy and Information as one of the four clusters in Shanghai for the development of the artificial intelligence industry.
Earlier this month, Lujiazui Group, the largest state-owned developer in Shanghai’s Pudong district, won a bid for a 89,900 square meter site in Zhangjiang about five kilometers south of Keppel’s project, where it will undertake development of a set of seven high-rise buildings, including one of a pair of 320-meter supertall towers in the eastern Shanghai suburb.
Keppel Expands Portfolio in Top Cities
Keppel’s Shanghai purchase is the company’s third acquisition of a property within a mainland China high tech district within the past year.
Keppel had announced on 1 September that it had purchased an office building in Beijing’s Zhongguancun high tech hub for RMB 178.6 million ($25 million), with that acquisition in the capital’s software hub coming just eight months after the Singapore firm had agreed to spend RMB 555 million to make its first acquisition in Zhongguancun on 31 December of last year.
The company also pursued commercial assets with its agreement earlier last week to acquire a 30 percent stake in Westmin Plaza, an office and retail development in Guangzhou from Chinese real estate developer Topchain Group in a deal valued at HK$141.4 million.
Keppel Land has also increased its Shanghai footprint in March this year when it teamed up with its Keppel Capital private equity division and a consortium of co-investors to acquire the Yi Fang Tower, a recently completed commercial development in Shanghai’s Hongkou district for RMB 4.6 billion.