Keppel JV Aims to Upgrade China’s Office Assets

A unit of Singapore’s Keppel Corporation has formed a joint venture with Shanghai-based developer Topchain to manage investment properties, mainly offices and business parks, with asset enhancement potential in China.

The indirect wholly owned subsidiary, Keppel Yong Da Property Management (Shanghai) Co Ltd, and Shanghai Topchain Link Century Industrial Development Co Ltd will subscribe for respective equity stakes of 49 percent and 51 percent in the amounts of RMB 4.9 million ($760,000) and RMB 5.1 million, Keppel said Wednesday in a press release.

The still-unnamed JV will provide services such as design, planning submission and construction management during the asset enhancement stage, as well as leasing and property management during the operations stage, starting with assets owned by Keppel Land China and Topchain in Shanghai and later extending to properties owned by third parties.

“This strategic partnership with Topchain is in line with Keppel’s Vision 2030 and Keppel Land’s strategy, where we seek to pursue a more asset-light business model and deliver smart and innovative urban space solutions which are highly complementary to our core real estate business,” said Ben Lee, chief operating officer of Keppel Land and president of Keppel Land China.

Partnership Grows

One of the seed projects under the JV will be the provision of asset management services at The Kube, a commercial property of Keppel Land China in Shanghai’s Zhangjiang Hi-Tech Park.

Keppel previously worked with Topchain on the refit of Guangzhou’s Westmin Plaza commercial complex, which is generating higher rental income after the completion of asset enhancement initiatives last year, Lee said.

In September 2019, Keppel Land China acquired a 30 percent stake in Westmin Plaza for HK$141.4 million ($18.2 million now), as Topchain continued to hold the remaining 70 percent interest. At that time, the property in Liwan district had 42,533 square metres (457,821 square feet) of gross floor area across three storeys of retail space and 14 storeys of office space.

The new JV is meant to help Keppel Land China seize further opportunities in the mainland’s sizeable urban renewal market and offer platforms for the application of Keppel Land’s smart building solutions.

Shared Vision

Topchain chairman Du Jing, a former executive vice president at developer China Vanke, said his group and Keppel share many similarities in terms of corporate development strategies and their views on development trends in the asset management industry.

“Subsequent to our successful partnership with Keppel Land on the Westmin Plaza in Guangzhou, we are very happy to deepen collaboration with Keppel Land through this joint platform to manage investment properties, and hope that we can complement each other’s strengths, and achieve mutually beneficial and win-win cooperation,” Du said.

The newly announced partnership follows last month’s launch of Golden Union Assets, an urban renewal platform targeting RMB 50 billion in assets under management in the next three years.

US private equity major Warburg Pincus set up the business with Shanghai-based Golden Union Group, a redevelopment specialist focused on mainland China’s megacities. Together the partners have seeded the platform with 19 properties in core locations of Shanghai and Beijing.