Kerry Properties has won a government tender for a site near Shanghai’s Yuyuan Garden for RMB 8.78 billion ($1.2 billion) to move a step closer to consolidating a supersized mixed-use project.
The bid is for the second of two sets of plots along Jinling Road for which Kerry was shortlisted in November 2021, with the six parcels providing for a gross floor area of 308,000 square metres (3.3 million square feet). The developer led by the youngest son of billionaire founder Robert Kuok bagged an adjacent site just a few blocks east of People’s Square in January of last year for $2.1 billion.
Upon completion of the bid, Hong Kong-listed Kerry will secure the land use rights for the 82,459 square metre combined site, which is expected to yield 506,500 square metres of gross floor area for housing, offices, shops, hotels and other amenities, the company said Tuesday in a release.
“We are delighted to win this bid for the Huangpu Jinling Road Project, and to be able to unify all 10 adjacent plots to create an iconic mixed-use development above the busy Yuyuan interchange metro station,” said Dennis Au, executive director and deputy CEO of Kerry Properties. “This land acquisition is well-aligned with our selective landbanking strategy.”
New Landmark to Emerge
Kerry envisions the megaproject in Shanghai’s former French concession as a new landmark featuring residential apartments and shikumen-style townhouses, high- and low-rise offices, retail spaces and hotel accommodation within walking distance of Yu Gardens and The Bund.
Bounded by Ninghai Dong Road and Renmin Road on the north and south, and bisected by key artery Henan Road, the finished project could dwarf Shui On Land’s nearby Xintiandi complex, which occupies a 30,000 square metre site.
Set in a neighbourhood that mixes Chinese and French architectural styles, the development will enjoy direct access to Yuyuan Garden station and its two Metro lines. Kerry promises visitors a panoramic view of the Lujiazui financial district in Pudong and the Huangpu River skyline.
Kerry previously developed the 347,000 square metre Jing An Kerry Center and the 253,000 square metre Kerry Parkside complex in Pudong. Au said the investment portfolio in central Shanghai would provide long-term growth as the new project strengthens Kerry’s premium property sales pipeline in the medium term.
“Our group remains committed towards our continued confidence in the city of Shanghai and the sustained growth of mainland China,” the deputy CEO said.
Developers Descend on City
Kerry’s latest milestone comes after Swire Properties last September secured a deal to develop its own mixed-use project across the river in Pudong. Representatives from the real estate arm of the centuries-old trading firm signed a letter of intent with Lujiazui Group to build a 600,000 square metre project in the district’s Qiantan area.
Lujiazui had signed a cooperation framework agreement with Hongkong Land in 2015 to jointly develop the site at an estimated investment of RMB 20 billion ($2.8 billion), but the deal was scrapped in December 2018 because “certain conditions precedent were not fulfilled”, according to a statement by the division of Jardine Matheson Group.
Last December, a joint venture led by Shui On Land won the land use rights to develop a residential project on a plot in Yangpu district with a bid of RMB 2.38 billion ($340 million). A wholly owned subsidiary of Shui On holds 60 percent of the JV, with the remaining 40 percent held by state-owned developer Shanghai Yangshupu.
Shui On in 2019 had paid a combined RMB 5.74 billion ($820 million) for a pair of Shanghai development sites: a 15,258 square metre commercial plot in Putuo district for an office and retail complex modelled after its Xintiandi project, and a 90,059 square metre set of residential parcels in Qingpu district.
In April of this year, Shanghai concluded its first land auction of 2023 with the sale of all 19 plots on offer for RMB 51.9 billion ($7.5 billion). State-owned Poly Developments obtained three parcels, followed by Vanke and China Railway Construction Corp with two each.