Singapore’s Keppel Land has purchased an 18 hectare residential site in Wuxi, China, for RMB 2.53 billion ($387 million) via a government land tender, the company announced on Monday.
Approved for development of a gross floor area of about 360,500 square meters, the government-backed southeast Asian developer says it intends to build a total of 2,755 homes on the site in eastern China’s Jiangsu province, just over midway on the high speed rail line from Nanjing to Shanghai.
Keppel Keen on Wuxi
“With Wuxi’s strong economic growth and positive residential market outlook, coupled with the prime location of the site in close proximity to amenities, we are confident that the new residential development will receive strong demand from homeowners looking for quality, thoughtfully designed homes with strong value propositions,” Keppel Land CEO Ang Wee Gee said. The project plans include construction of 2,053 high-rise, 456 mid-rise and 246 low-rise homes on the site.
Ang called Wuxi one of the Singaporean developer’s target cities in China where the company would further deepen its presence, along with Shanghai, Beijing, Tianjin and Chengdu.
Keppel Land China was the only firm to bid on the site, according to an account in the 21st Century Business Herald, with conditions for the tender said to require that bidders be foreign firms registered in Wuxi New District, where the project is located, and that overseas investors pay for at least 50 percent of the land price in foreign currency. The site is surrounded by projects developed by prominent Chinese developers including Vanke, Evergrande, R&F Properties and China Overseas Land and Investment.
Focusing on Top Cities
Keppel’s move to invest in Wuxi follows a pair of divestments from deals in smaller cities in recent months.
In late October, Keppel Land sold its share of a yacht club project in Zhongshan, Guangdong, for RMB 2.9 billion ($440 million), explaining at the time that it wished to focus its efforts on its five target cities, where it believed higher returns were possible. That stake sale has since been the subject of a dispute between the Singaporean firm and one of its partners in the project.
In addition to the Zhongshan stake disposal, in August, Keppel Land also sold a waterfront project in Nantong, Jiangsu. A subsidiary of Vanke paid RMB 1.43 billion ($183 million) for Keppel’s 100 percent interest in Keppel Lakefront (Nantong) Property Development, which controls a residential project in the Yangtze river delta city.
In July, Keppel Land teamed with sister firm Alpha Investment Partners and Germany’s Allianz Group to purchase a mixed-use project in Shanghai from SOHO China for around RMB 3.6 billion ($525 million).