International Property

Chinese developer Greenland Hong Kong strikes New York investment deal with Kuwaiti royal

PUBLISHED : Tuesday, 26 April, 2016, 10:15pm
UPDATED : Tuesday, 26 April, 2016, 10:15pm

Greenland Hong Kong has struck a deal that would result in a firm controlled by a Kuwaiti royal buying a stake in it, co-investment on a major New York project, and the formation of a US$8 billion real estate fund.

Hong Kong-listed Greenland Hong Kong, a unit of Shanghai-listed Greenland Group – mainland China’s largest developer by sales – has inked a framework agreement on “strategic cooperation” with Kuwait Strategic Investors’ Al Waseet International (AWI), controlled by a member of Kuwait’s royal family.

“Greenland Group has always been confident in the United States market and has developed many real estate projects in New York City and Los Angeles,” chairman Zhang Yuliang said in a statement late on Tuesday.

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“The Park Lane project is going to be an innovative and landmark property ... the property will redefine New York’s real estate market and become a landmark in New York City.”

Kuwait Strategic is owned by Sheikh Sabah Al-Jaber Al-Mubarak Al-Hamad

Al-Mubarak Al-Sabah, a direct descendant of Sheikh Mubarak Al-Sabah the Great, the founder of modern-day Kuwait.

AWI has agreed to buy 459 million Greenland Hong Kong convertible preferred shares in exchange for its 41 per cent stake in the Project Land luxury property project involving a site area of 2,425 square metres and 34,207 square metres of gross floor area.

They are convertible into shares on the third anniversary of their issuance or any date when the weighted average price of Greenland Hong Kong shares reaches HK$5 or above, whichever comes first. They closed on Tuesday 3.7 per cent higher at HK$3.35.

If all the preference shares are converted into Greenland Hong Kong shares, Kuwait Strategic will become the second largest shareholder of the firm.

Project Land is located between the Fifth and Sixth Avenue in Manhattan’s financial centre, in New York city’s Central Park South district that is known as the “billionaires’ circle”.

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The project is estimated to be able to generate sales revenue of US$3.6 billion to US$4.3 billion, Greenland Hong Kong said, without providing a time frame.

As part of the agreement, Kuwait Strategic will also jointly set up with Greenland Hong Kong the “silk road integrated real estate fund” with a target size of US$8 billion to invest in “world class” real estate projects, including residential, commercial, office, retail and hotel ones.

The fund will start “in-depth cooperation” with several Middle East sovereign funds in the future, and will seek opportunities in so-called “Silk Road” and “Maritime Silk Road” nations covering the Middle East, Southeast Asia, Africa and Europe.

The framework deal sets out the general principles of the potential transactions, which are pending further negotiations and the signing of definitive agreements on or before May 26, Greenland Hong Kong said.

Greenland Hong Kong has developed projects in Shanghai, Kunming, Huangshan, Suzhou, Changshu, Wuxi, Haikou, Taiyuan, Hangzhou, Ningbo, Nanchang and Xuzhou. Its parent is also active in the US market.