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Kerry joins Pudong bandwagon

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Partners to invest US$489m in hotel and office complex in heart of financial hub

Kerry Properties and its associates have agreed to commit at least US$489 million in a property development project in Pudong, Shanghai - the latest Hong Kong developer to snap up a prime site in the burgeoning financial district.

Kerry and its associates, hotel and resort operator Shangri-La Asia and Singapore property developer Allgreen Properties, said yesterday they planned to join forces with a mainland company to develop a 58,900 square metre site adjacent to the Shanghai New International Expo Centre in Lujiazui into a hotel, serviced apartments and office complex.

The deal boosts the number in Kerry's Shanghai portfolio to six and means a fresh investment by Shangri-La after the hotel group completed a US$138 million expansion at the Pudong Shangri-La hotel in September.

Shares in Kerry and Shangri-La performed well yesterday, with Kerry closing 1.4 per cent higher at $21.70 and the hotelier rising 0.45 per cent to $11.20, bucking a general retreat in the stock market.

Part of the deal involves setting up a Sino-foreign joint venture, Shanghai Pudong Kerry City Properties, to be owned 40.8 per cent by Kerry, 23.2 per cent by Shangri-La, 16 per cent by Allgreen and the rest by Shanghai-listed developer Shanghai Liujiazui Finance and Trade Zone Development.

Kerry said the investment cost of the development including the land acquisition was estimated at US$489.6 million and that the registered capital of the joint venture would be US$163.2 million.

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