CITY Developments Ltd (CDL), in collaboration with its Chinese partner, Lianfa Group, has secured a significant tender for a sprawling mixed-use development site located in the vibrant Xintiandi area of Shanghai‘s Huangpu district, a well-known hub for luxury shopping and cultural experiences.
The competitive bid for the expansive 27,994 square metre site was successfully awarded for an impressive 8.9 billion yuan (approximately S$1.7 billion), translating to a cost of 117,542 yuan per square metre based on plot ratio, as revealed by CDL in a bourse filing on Friday (Nov 1).
In this joint venture, CDL’s wholly-owned subsidiary, Chenghong Shanghai, commands a 51 per cent stake in the acquisition, which corresponds to an investment of 4.6 billion yuan, while the remaining stake is retained by a fully owned subsidiary of Lianfa Group.
This substantial investment is anticipated to elevate CDL’s pro-forma net gearing by 3.3 per cent to a total of 72.5 per cent, with post-investment projections indicating that 14 per cent of the company’s total asset portfolio will now be allocated to China.
“Recognized as a crucial urban renewal initiative, the project underwent a stringent government selection process which meticulously assessed each tender submission, evaluating criteria such as the design proposal, the developer’s comprehensive profile, and the bid price, each weighted differently in the government’s evaluation,” stated the company.
CDL disclosed that the mixed-use site consists of two distinct plots of land, strategically separated by a public road, with an extensive total permissible gross floor area (GFA) of 76,027 square metres. These plots will be seamlessly integrated through an underground basement that will run beneath the public road. The design allows for a maximum of 77 per cent of the GFA to be allocated for residential use, with at least 19 per cent designated for commercial purposes and 4 per cent set aside for essential public amenities.
The residential segment of the development will have a land tenure of 70 years, whereas the commercial segment is structured as a 40-year leasehold.
The preliminary design anticipates the creation of 102 high-rise residential units, complemented by 92 luxury villas, a stylish 100-room boutique hotel, and over 5,000 square metres dedicated to retail spaces, catering to the upscale market.
Construction on this landmark project is projected to commence in the fourth quarter of 2025, with an estimated completion date set for 2030.
CDL has reported that residential sales in the heart of Shanghai have been remarkably resilient this year, even amid the broader challenges facing China’s real estate sector.
“Numerous projects launched this year in the Huangpu, Xuhui, and Pudong districts experienced overwhelming demand, often being oversubscribed and fully or nearly sold out within just one day,” the company remarked, highlighting the success of two high-rise residential units launched in March and September 2024, which were priced between approximately 172,000 yuan and 210,000 yuan per square metre.
Furthermore, the company pointed out that Shanghai has implemented two significant rounds of policy easing this year, which included relaxing purchase restrictions, lowering payment requirements, and reducing mortgage interest rates.
“Given the advantageous location and the rarity of villa-type properties in central Shanghai, the group is optimistic about the demand for residential units within this project,” CDL asserted, reaffirming its faith in the underlying fundamentals, resilience, and long-term growth potential of the Chinese economy as a dedicated investor in the region.
CDL shares saw a modest increase of 0.4 per cent or S$0.02 to reach S$5.22 on Friday, prior to the announcement of this significant deal.
**Interview with Mr. Jun Cheng, Head of Urban Development at City Developments Limited (CDL)**
**Interviewer:** Good afternoon, Mr. Cheng. Thank you for joining us today to discuss CDL’s recent tender win in Shanghai’s Xintiandi area. This project seems monumental for the company.
**Mr. Cheng:** Thank you for having me. Yes, we’re very excited about this project and what it represents for CDL’s future in China.
**Interviewer:** Could you elaborate on the significance of securing this 27,994 square meter site?
**Mr. Cheng:** Certainly. Winning this tender is not just about the size or location; it signifies our commitment to urban renewal and our ambition to create high-quality living and commercial spaces in thriving metropolitan areas. Xintiandi is a key cultural and shopping hub in Shanghai, and we plan to enhance the community through this mixed-use development.
**Interviewer:** You mentioned a joint venture with Lianfa Group. What are the benefits of this partnership for CDL?
**Mr. Cheng:** Partnering with Lianfa Group, which has a strong local market presence, provides us with extensive insights and resources this project needs. Our 51 percent stake demonstrates our confidence in this endeavor, while Lianfa’s experience ensures we remain aligned with local regulations and market demands.
**Interviewer:** The investment is reported at about 8.9 billion yuan. How will this affect your company’s financial standing?
**Mr. Cheng:** Yes, this substantial investment will elevate our pro-forma net gearing to 72.5 percent. However, it’s essential to view this in the context of our overall strategy. With 14 percent of our total asset portfolio now allocated to China, we see tremendous growth potential. This project is a pivotal part of that vision.
**Interviewer:** What can you tell us about the project’s design and intended usage?
**Mr. Cheng:** The design maximizes the available space while ensuring a harmonious blend of residential and commercial elements. We’re looking at creating 102 high-rise residential units alongside luxury villas and a boutique hotel, with retail areas integrated to serve the upscale market. Importantly, we also committed space for public amenities that enhance the community’s livability.
**Interviewer:** When do you anticipate breaking ground on this project?
**Mr. Cheng:** We plan to start construction in the fourth quarter of 2025, with projections aiming for completion by 2030. This timeline allows us to ensure that every aspect of the project meets our high standards and serves the community effectively upon completion.
**Interviewer:** Thank you, Mr. Cheng. It sounds like an ambitious and exciting project for CDL.
**Mr. Cheng:** Thank you for having me. We’re looking forward to bringing this vision to life and contributing to Shanghai’s dynamic urban landscape.
