Swire chasing 2 stakes worth US$1.3 billion in Shanghai firms with prime sites in Pudong
- The two potential investments show firm’s ‘long-term commitment to the Chinese mainland’, Swire Properties CEO says
- Firm looking to take up 40 per cent stakes each in Shanghai Dongmao Real Estate and Shanghai Yaolong Investment
The company, one of Hong Kong’s oldest and largest builders of luxury homes and grade A offices, said in a statement on Monday that its wholly-owned subsidiary Elegant Ocean was looking to take a 40 per cent stake in Shanghai Dongmao Real Estate for 6.6 billion yuan, while another fully-owned unit, United Hill, planned to acquire a similar stake in Shanghai Yaolong Investment for 3.1 billion yuan.
Swire said the transactions were subject to approval by shareholders of state-owned Lujiazui Development, which has a first right to acquire these stakes. Lujiazui Development currently holds 60 per cent stakes in each of the two companies.
“We are very pleased to have this opportunity to bid for two sites with such promising development potential,” Tim Blackburn, Swire Properties’ CEO, said in the statement. “We are steadily building up an exciting project pipeline in the Chinese mainland under our ambitious HK$100 billion [US$12.8 billion] investment plan, and we want to do more.
“These two potential investments represent a very important part of this growth strategy, and demonstrate our long-term commitment to the Chinese mainland.”
Dongmao owns a land parcel in the Yangjing area on the eastern bank of Huangpu River that can be developed into retail space, office buildings and residential units covering a total gross area of 389,932 square metres. Yaolong is developing a mixed-use complex that encompasses retail, office and residential space in the New Bund area in Pudong, or east of Huangpu, which will have a total gross floor area of 602,431 square metres.
Sellers of the stakes are also state-owned companies based in Shanghai. These are Lujiazui Group, the parent of Lujiazui Development which holds 40 per cent of Dongmao, and Qiantan Investment, which owns 40 per cent of Yaolong.
A property crisis since 2020 has engulfed dozens of mainland Chinese developers, resulting in a wave of bond and loan defaults involving companies such as China Evergrande Group and Kaisa Group Holdings.
Swire said in the statement that its investment in the two developments in Pudong was in line with key strategies to continue to focus on development on the mainland and on transformational mixed-use projects in urban areas.
For instance, Swire opened its landmark commercial property, the 120,000 square metre Taikoo Li Qiantan complex in Qiantan, Pudong, an emerging business district, through its venture with Lujiazui Group in 2021.
