Perennial Real Estate Holdings, through its 45 per cent owned joint venture (JV) vehicle Perennial HC Holdings, has won the tender to develop two plots of land next to the Kunming South High-Speed Railway (HSR) in Yunnan, China, at a land tender price of 341.5 million yuan (about S$67.6 million).
The Kunming South HSR Integrated Development is expected to comprise a general hospital, eldercare apartments and commercial apartments for long-term lease, as well as retail components and a cluster of hotels.
The tender was awarded by the People's Government of Chenggong District, Kunming, and the investment will be funded via equity capital calls from shareholders of the JV vehicle, Perennial said.
The development also has a tenure of 40 years, with its commercial land use right expiring in 2058. It covers a land area of about 65,054 square metres, and has a total maximum allowable gross floor area (GFA) of approximately 627,600 square metres.
Perennial on Thursday added that the tender aligns with its JV vehicle's strategy to acquire and develop HSR healthcare and commercial integrated developments in Tier 1 or Tier 2 cities and provincial capitals in China with good connectivity to transportation hubs, as this will enable it to serve large cities with sizeable populations.
"Kunming South HSR Integrated Development marks the second asset for the Perennial-syndicated JV vehicle, and the fourth HSR healthcare and commercial integrated development in China for Perennial. Together with our existing Chengdu HSR development, which is adjacent to one of the largest HSR stations in Southwest China, our presence in Southwest China has been significantly strengthened," said Perennial's CEO Pua Seck Guan.
The transaction is not expected to have any material impact on the net tangible assets, or earnings per share of the company for the current financial year, Perennial noted. The counter closed unchanged at S$0.60 on Thursday.
Adapted from The Business Times, 24 Dec 2018.