SINGAPORE (Feb 20): Hongkong Land Holdings has won a government auction for a prime 23.1 hectare mixed-use site on the West Bund of Shanghai, China, with a bid of RMB 31.05 billion ($6.19 billion).
The land is located alongside the Huangpu River South Extension area in the Xuhui District of Shanghai.
With an accountable gross floor area (GFA) of around 1.1 million sqm, the land will be used primarily for Grade A office, retail, residential and hotel purposes.
The term of the land use rights is 40 years for retail and hotel purposes, 50 years for office purposes, and 70 years for residential purposes.
In accordance with the land grant, approximately 24% of the accountable GFA may be developed for sale.
Hongkong Land says the acquisition is an attractive opportunity for the group to develop and operate a commercial complex of scale in a prime location within China’s commercial hub.
The development of the land will be in multiple phases, and is expected to complete by 2027.
The board believes the acquisition, which is expected to provide a stable stream of earnings after the development is completed, is in the best interests of the group.
Hongkong Land says it is considering a range of funding options, including the use of internal resources and external funding such as pre-sales, cooperation with strategic partners, and debt
The group adds that it has sufficient liquidity to fund the land cost and does not intend to seek funding from shareholders.
Shares in Hongkong Land close 0.4% lower at US$5.48 on Thursday.
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