Transactions - JUNE 26, 2017

Keppel Land China JV acquires mixed-use development in Shanghai for $525m

by Andrea Waitrovich

Keppel Land China, a wholly-owned subsidiary of Keppel Land, and Alpha Investment Partners, a wholly-owned subsidiary of Keppel Capital Holdings, together with a co-investor, are partnering to acquire an office and retail mixed-used development, SOHO Hongkou, in Shanghai for approximately $525 million.

Christina Tan, CEO of Keppel Capital and managing director of Alpha, noted, “Being the financial and commercial hub of China, Shanghai has seen the need for more high-quality and well-located developments in the city.”

SOHO Hongkou offers a total leasable area of 753,925 square feet, which comprises 702,926 square feet and 50,999 square feet of office and retail space, respectively. Completed during the fourth quarter 2015, it has an occupancy rate of 97 percent as of March 2017, with tenants including Panasonic and China Pacific Insurance.

SOHO Hongkou is strategically located in the North Sichuan Road fringe central business district. The Beiheng Tunnel, which will be the city's longest east-west link road when completed in early 2020, will further enhance the overall connectivity of the North Sichuan Road fringe CBD and link SOHO Hongkou to Yangpu in the east and Hongqiao Transportation Hub in the west.

Keppel Land China, through its wholly-owned subsidiary, Joysville Investment, has entered into a joint venture agreement to acquire a 30 percent stake in Vision (III), which holds an indirect 100 percent stake in SOHO Hongkou, located in Hongkou District. Alpha’s Alpha Asia Macro Trends Fund (AAMTF) III will hold a 40 percent stake and the remaining 30 percent stake will be held by its co-investor.

“This is the second time that Keppel Land China and Alpha are harnessing strengths across the Keppel Group and collaborating to acquire a premium property in a strategic location in Shanghai, after Life Hub @ Jinqiao,” said Ang Wee Gee, CEO of Keppel Land and chairman of Keppel Land China. “This acquisition is also in line with our strategy to scale up in high‐growth cities, such as Shanghai, where Keppel Land China has established a firm foothold.”

In September 2016, Keppel Land China and Alpha divested a mixed-use development, Life Hub @ Jinqiao, in Shanghai. Since the acquisition of the property in 2013, proactive asset management and innovative enhancement efforts have seen the property maintain consistently high occupancy levels with a good mix of international and local retailers.



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