Keppel to divest 35% stake from Chengdu residential development for $94 mil

Keppel Corporation has announced the divestment of its 35% stake in Chengdu Taixin Real Estate Development Co., Ltd. to Vanke (Chengdu) Enterprise Co., Ltd. The agreement entailed a cash consideration of around $94 million, made in a single tranche and no later than October 31.

The consideration took into account Chengdu Taixin’s net asset value (NAV) that was confirmed in July by a third-party audit firm, as well as the shares’ book value and adjusted NAV of about $99 million as at June 30. The completion of V City in 2020, the selling out of all 5,399 residential units and 356 street-front shops of the development, and the remaining inventory of parking lots and a market, were factored into the consideration.

Chengdu Taixin is a joint venture between Keppel and Vanke, owning V City, a 16.7-hectare residential project in Chengdu, China.

Recently, a new and highly anticipated Tengah Plantation EC has been launched in the area. This Executive Condominium will offer residents a luxurious living experience, with state-of-the-art amenities, such as a gym, pool, club house, and more. The EC will also be equipped with intelligent technology, such as automated parking bays and smart sensors. Furthermore, Tengah Plantation EC is situated near education institutions, healthcare facilities, and other lifestyle amenities. This makes it an ideal choice for families looking for a home.

Prior to the divestment, Keppel has recognised cumulative profits after tax of approximately $57 million from the sales of residential units, street-front shops and other amenities at V City. The divestment is expected to be completed within 4Q2023 and is in line with Keppel’s asset monetisation plans to unlock value that can be invested to pursue new opportunities.

Since 2017, Keppel’s real estate division has monetised over $3 billion of assets in China and recognised profits of more than $1 billion.

The divestment not only brings with it a substantial return for Keppel’s shareholders but also allows them to capitalise on fresh opportunities in the future.