Singapore CDL clinches better deal to buy China’s Sincere Property amid pandemic
SINGAPORE, NNA - Singapore’s City Development Ltd. (CDL) will acquire a 51.01 percent stake in Sincere Property Group for 4.39 billion yuan ($620 million), stepping up its presence in the Chinese real estate market.
CDL said in a press release on Wednesday the company managed to renegotiate its earlier deal for a more competitive price following the global coronavirus pandemic. In May last year, CDL announced it would buy 24 percent of the major Chinese developer for 5.5 billion yuan.
“Given the adverse impact of the Covid-19 crisis and the global uncertainty, CDL has taken the opportunity to negotiate new terms for its investment into Sincere Property,” CDL said.
Under the renegotiated deal, a call option will also be granted to CDL which could exercise to buy an additional 9 percent stake for 770 million yuan, pushing up CDL’s interest in Sincere Property Group to 60.01 percent.
As of Dec. 31, 2019, China accounted for 13 percent of CDL Group’s global asset portfolio worth SG$23.2 billion ($16.3 billion). The deal will increase the ratio to 17 percent while allowing CDL to expand its capabilities across residential properties, offices, business parks, serviced residences and hotels, according to CDL.
“Despite our relatively late entry into China’s real estate market only a decade ago, this investment will immediately accelerate CDL’s geographical presence from three to 18 cities in China,” Sherman Kwek, Group CEO of CDL, said in the press release.