Wilmar International says wholly-owned subsidiary, WCA Pte. Ltd. (WPL), has entered into a master joint venture agreement with Kerry Properties (China) Limited (KPCL) and Shangri-La China Limited (SACL) to establish joint venture companies for real-estate development, operation, sale, leasing, property management and hotel development, operation and management in Bayuquan, Yingkou City, Liaoning Province, China.
Wilmar says the demand for quality residential, commercial and hotel property in the second and third-tier cities in China is expected to experience strong growth in the future. The company says its main contribution to the JV will be the sourcing of suitable sites.
The shareholdings of WPL, KPCL and SACL in the JVCO(s) are in the proportions of 35%, 40% and 25% respectively. Wilmar’s investment in the JVCO(s) for the project sites is RMB889.15 million, based on the maximum total investment in the JVCO(s) of RMB2,569 million.
Funding for the JVCO(s) will be from internal sources of funds and bank borrowings. The investment in the JVCO(s) for the Project Sites is not expected to have a material impact on Wilmar’s financial position.
Wilmar, KPCL and SACL entered into the Master JVA following their first successful joint bid for three sites in Bayuquan, Yingkou City, Liaoning Province, China, for a total cash consideration of RMB240 million ($47.3 million).
The project sites are designated for residential, commercial and hotel use and have a total gross site area of 200,000 square metres. The terms for the grant of the land use rights of the Project Sites are 70 years for residential and 40 years for commercial (hotel) use.
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