On Nov 1, CDL, along with its Chinese partner Lianfa Group was awarded the tender for a mixed-use development site in the Xintiandi area in Shanghai’s Huangpu district for RMB8.94 billion ($1.66 billion). The site area is 27,994 square metres (sqm), and was awarded on Nov 1, following a government land tender which closed on October 28. CDL has a 51% stake in the joint-venture.
Analysts' reactions are neutral to positive on the announcement on Nov 1 of City Developments’ (CDL) re-entry into China with a somewhat significant sized acquisition. In 2021, CDL provided an impairment loss of $1.78 billion on its investment in the Sincere Property, a Chinese developer.
The analysts have made positive comments peppered with caveats. They point out that the move to acquire an attractively priced site in the choicest area in Shanghai is contrary to the announcement in February by group CEO Sherman Kwek that he planned to divest $1 billion this year to lower gearing. In August, Kwek acknowledged that the developer is likely to achieve around $300 million in divestments instead.
