Shareholders of Singapore- listed developer Ying Li International Real Estate yesterday approved a deal which will see China Everbright (CEL) investing $284 million in Ying Li.
The deal is expected to be completed by the end of next month. It will make CEL the second-largest shareholder of Ying Li, after Mr Fang Ming, the firm's executive chairman and chief executive officer.
As part of the deal, Chongqing-based Ying Li is set to expand into the major Chinese cities of Beijing, Guangzhou, Shanghai and Shenzhen.
It may even move into Hong Kong and Singapore, the board told a media briefing yesterday.
Ying Li said it will benefit from CEL's strong acquisition, execution and management capabilities, given its real estate portfolio of 18 commercial and residential projects, mostly in Beijing and Shanghai.
It also stands to benefit from CEL's financing structures, with its real estate funds consisting of US dollar-denominated as well as yuan-denominated funds.
In Singapore, Ying Li envisions partnerships with local developers, said Mr Christopher Chong, lead independent director for Ying Li.
The focus will likely be on mixed developments of office and retail space in the central region, given Ying Li's track record in the area and the fact that its clientele has largely been in the financial sector so far, he added.
Mr James Pan, CEL's head of real estate investment and fund raising, said Ying Li's listing here makes it ideal for it to build local presence.
"Singapore and Hong Kong are also important capital markets in Asia."
In the short term, however, Ying Li will likely head for Beijing and Shanghai first, where "there are projects CEL already has, or has access to, or knows what opportunities exist", said Mr Pan. He added that it is possible Ying Li will buy existing projects that could use its engineering expertise.
As at the end of last year, CEL's parent, China Everbright Group, had more than 2.6 trillion yuan (S$530 billion) of total assets, of which property accounted for about half.
If the two groups end up cooperating, it would follow listing rules and be to the benefit of shareholders of both companies, Mr Pan said.
But Chongqing will remain a key market for Ying Li. "Due to the market slowdown, most developers are cautious in terms of land acquisition, which provides us with opportunities," he noted.
This article was first published on September 03, 2014.
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