This deal is CDL’s single biggest investment in the world’s second largest economy. Subject to various conditions precedent, the investment is expected to be fully completed by Q4 2019.
Upon completion, CDL will indirectly hold an approximately 24% effective equity stake in Sincere, making CDL the second largest shareholder after Sincere’s Founder and Chairman, Mr Wu Xu.
CDL will have representation on Sincere’s Board at both offshore and onshore levels and have the right to participate in key decision making.
In addition, CDL will increase its intended stake in Shanghai Hongqiao Sincere Centre (Phase 2) (上海虹桥协信中心 (二期)), a prime commercial property in the heart of Shanghai’s Hongqiao Central Business District (CBD), from 70% to 100% for a total purchase price of RMB 1.75 billion (approximately S$344 million).
Who is Sincere?
With a track record of over 20 years, Sincere is ranked as one of China’s Top 100 Developers by China Real Estate Association (中国房地产业协会) and one of China’s Top 10 Business Park Developers and Operators by Guandian (观点地产).
It has a full set of development and asset management capabilities across different sectors, including residential, retail, office, serviced apartment, business park and large-scale mixed-use development.
Sincere’s geographical presence in China spans 20 cities (including Tier 1 and Tier 2 cities) where it employs over 1,800 professionals.
It has a full spectrum of residential projects ranging from the high-end to the mass market, which include villas as well as low- and high-rise condominiums. It also has more than 15 business parks, which are under development or in operation, with a total GFA over 5 million sqm.
Sincere also owns and operates a substantial portfolio of investment properties in China, including 14 retail malls with a total GFA of about 700,000 sqm, two serviced residences with 536 apartments and five hotels with approximately 1,400 rooms.
Sincere’s contracted sales grew at a compounded annual growth rate of 47% from RMB 9.9 billion (approximately S$2 billion) in 2016 to RMB 21.3 billion (approximately S$4.3 billion) in 2018.
Mr Sherman Kwek, Group Chief Executive Officer of CDL, said, “Leveraging Sincere’s development and asset management capabilities, local expertise and wide geographical presence in China, CDL will be able to significantly boost its scale and accelerate its growth in this huge market with a substantial portfolio and pipeline of development projects and investment properties.”
“Sincere’s capabilities in retail, business parks and serviced apartments will also enhance and deepen CDL’s expertise in China. Moreover, there is tremendous potential to develop fund management platforms via Sincere’s existing portfolio and through new acquisitions.”
Mr Wu Xu, Founder and Chairman of Sincere, said, “This strategic partnership also brings together Sincere’s deep local capabilities and CDL’s extensive international expertise.”
“Our combined strengths will not only give our joint venture a distinct advantage in property development and asset management but also open doors to further growth opportunities, such as tapping CDL’s experience and networks to jointly explore fund management initiatives.”