Allgreen Consortium Wins Nanjing Commercial Site

Source : The Business Times, September 25, 2008

Its unit teams up with subsidiaries of Kerry Prop and Shangri-La Asia for 200m yuan purchase

A THREE-PARTY consortium, which includes Singapore-listed Allgreen Properties, has won the bid for a commercial site in China's Nanjing City.

Allgreen, which participated in the tender exercise through wholly owned subsidiary Belfin Investments, said the 17,014 square metre site is designated for hotel, commercial and office use.

The purchase price is 200 million yuan (S$41.6 million).

The other members in the consortium are subsidiaries of Kerry Properties and Shangri-la Asia.

To undertake the acquisition and development, the consortium will set up a foreign-owned enterprise in China. Allgreen, Kerry Properties and Shangri-La will have respective stakes of 15, 45 and 40 per cent.

Allgreen said in its announcement yesterday that it would benefit from the joint venture because of the partners' expertise in and understanding of China's property market.

Kerry Properties will provide project development, construction management and project consultancy services, while the Shangri-La group will provide hotel management services.

Allgreen has other joint investments with the two partners in Shanghai, Tianjin and Tangshan and more joint projects with Kerry in Chengdu, Shenyang and Qinhuangdao.

The maximum total investment cost for this latest Nanjing site is about 1.5 billion yuan.

Allgreen's share works out to about 225 million yuan, which it will finance this through internal funds and/or external borrowings.

Including this latest investment, Allgreen's total transactions with Kerry Properties and Shangri-la Asia amount to some $407.9 million, or 18.3 per cent of its latest audited net tangible assets as at Dec 31, 2007.

The investment is not expected to have any material impact on the earnings per share and net tangible assets per share of the Allgreen group for the current financial year.

Allgreen's net profit for the second quarter ended June 30 fell 36.5 per cent to $17.19 million, as revenue for the quarter fell 39 per cent to $74.12 million.

The company's shares closed unchanged at 67 cents yesterday.