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

Keppel Corporation has agreed to divest its 35% stake in Chengdu Taixin Real Estate Development Co., Ltd. to Vanke (Chengdu) Enterprise Co., Ltd. through its real estate division. The consideration for the stake will involve a single tranche of cash amounting to RMB504 million ($94 million).

Chengdu Taixin, a joint venture between Keppel and Vanke, owns V City, a 16.7-hectare residential project located in Chengdu, China. The consideration factored in the net asset value (NAV) of Chengdu Taixin). This NAV was confirmed in July by a third-party audit firm.

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It was also adjusted based on the shares’ book value and the NAV of $99 million as at June 30. The completion of V City in 2020 with all 5,399 residential units, 356 street-front shops of the development sold out was also included in the consideration. The remaining inventory of V City comprises parking lots and a market.

The divestment of Keppel’s stake is estimated to be completed by 4Q2023 and is part of Keppel’s asset monetisation plans. This is to unlock value and reinvest in new opportunities. Since 2017, Keppel’s real estate division has monetised assets worth over $3 billion in China and earned profits of more than $1 billion.

From the sales of residential units, street-front shops and other amenities, Keppel has recorded profits after tax amounting to approximately $57 million. It is expected that this divestment will generate more funds for Keppel’s new business opportunities.