China real estate developer CIFI Holdings announced on Monday that it had entered into a cooperation agreement with Henderson China Properties Limited to jointly develop an 84,751 square metre, mixed-use site in the centre of Shanghai’s Hongqiao area.
Shanghai-based CIFI originally acquired the site at auction in November 2013 for RMB2.144 billion. The project planned for the site, which is zoned for residential and commercial use, will have a gross floor area of 167,249 square metres, according to a statement from the company.
Under the terms of the agreement, CIFI and Henderson China will respectively hold 50% equity interest in the joint venture, and will bear responsibility for land acquistion in proportion to their shareholding in the joint venture. The two companies expect to invest a total of RMB2.144 billion in the project.
Mr. Lin Zhong, Chairman and Chief Executive Officer of CIFI, said, “We are delighted that Henderson China will jointly develop the Shanghai site with us. In the future, we will strive to reinforce long-term cooperation with other property developers and to actively promote the business development of CIFI.”
Second Cooperative Project for CIFI and Henderson
The Hongqiao joint venture marks the second cooperation between the two companies this year, after Henderson and CIFI agreed on a RMB 763 million joint venture development project in Hangzhou in July. The Hangzhou project is for a 216,700 square metre mixed-use project with CIFI holding 49 percent versus Henderson’s 51 percent equity in the development.
CIFI also received support from another Hong Kong source this year when RRJ Capital agreed to purchase US$50 million in newly issued shares in the developer. The investment fund manager had earlier purchased $100 million in CIFI bonds.
CIFI Holdings is ranked among China’s 50 largest property developers, and Henderson China is a subsidiary of Hong Kong-based Henderson Land (“Henderson Land”, HKEX code: 12). Henderson Land is an investment holding company whose subsidiaries are engaged in property development and investment, construction, infrastructure, and other sectors.