Real estate developer KERRY PPT (00683) has announced a significant move in Shanghai's property market. On July 30, 2026, a consortium comprising its indirect wholly-owned subsidiary, Shengyiao (Shanghai) Consulting Management Co., Ltd., and Shanghai Hengjiu Commercial Management Co., Ltd., successfully secured the land use rights for a plot in Shanghai. The winning bid amounted to RMB 2.705 billion (approximately HK$3.138 billion), excluding taxes, as confirmed by the local authorities.
The parties will enter into a shareholders' agreement to establish a project company, with Shengyiao holding a 95% stake and Hengjiu owning the remaining 5%. This entity will be responsible for holding and developing the land, as well as managing and operating the completed properties. Subsequently, the consortium will sign a land grant contract with the authorities to formally obtain the rights. Upon its formation, the project company will execute a supplementary agreement, assuming all rights and obligations under the land grant contract to manage the site's development, management, and operation. The bid deposit paid during the auction will be returned to the consortium per standard tender procedures.
Why embark on this joint venture?
The shareholders will provide funding to the project company proportional to their respective equity stakes. Under this arrangement, KERRY PPT group's maximum investment commitment for the entire project period is expected to be no more than RMB 5.035 billion (approximately HK$5.841 billion), representing 95% of the total commitment. The project site, with a total land area of approximately 95,800 square meters, is slated for development into a large-scale commercial and cultural project in the Yangsi area of Shanghai's Pudong New District, pending necessary planning and construction approvals.
The land parcel is divided into two sections. Plot 1, located at Lot 21Aa-04 in the Z000602 unit of Yangsi Community, Pudong, covers about 27,000 square meters. Plot 2 encompasses multiple lots at 21Ab-01, including above-ground sections E and F of Jingsan Road and underground space C, along with underground space of Lot 21Ca-01 and underground space D of Jingyi Road, totaling approximately 68,700 square meters, of which about 26,500 square meters are above ground.
This transaction aligns with KERRY PPT's strategy to establish and expand its investment property portfolio in core Chinese cities. The company's board believes the project will enhance its investment property footprint in Shanghai, generating long-term, recurring income through the development, management, and operation of commercial and cultural assets. Furthermore, the board is confident that the collaboration between the parties will combine their respective expertise in property development, investment, and commercial management, facilitating the project's successful implementation and long-term operations. Consequently, the board views this project as a means to create value for shareholders and support the group's sustainable growth.
Comments