Greentown China Holdings, Wharf Holdings form joint venture for Hangzhou land development
Greentown China Holdings Ltd and Wharf Holdings Ltd will join hands in a venture that will develop a CNY 2.58 billion or $425 million site in Hangzhou, Bloomberg reported. Greentown China Holdings is a property developer that constructs residential villas and low and high-rise apartment buildings for those with middle and high incomes. Wharf Holdings, meanwhile, is a shareholder in Greentown. It develops and invests in real estate properties and is an owner and manager of hotels as well as a logistics business developer.
Wharf Holdings will buy the 70,227 square meter residential site located in the Xiaoshan district of Zhejiang's provincial capital. Citing a Hong Kong stock exchange filing, the report said the two firms will form a 50-50 joint venture to develop the land. The partnership expects to build a gross floor area of 189, 613 square meters on the land.
The report quoted Greentown as saying, "The co-investment pursuant to the framework agreement will broaden the asset and earnings base of the company and further strengthen the company's position as a premier properties developer" in China.
The report said the joint investment could help lessen the expenses of developing land in Hangzhou. Last month, the city government increased the minimum downpayment needed for second homes from 60% to 70% as part of its plan to curb skyrocketing prices of real estate. Citing government data, the report said the prices of new homes in the city rose 11.2% in November compared to a year before. The gain was also an increase from the previous month's gain of 10.5%.
The family of billionaire Peter Woo controls Wharf Holdings. The filing also revealed that Wharf and its units hold a 24.3% stake in Greentown. In June last year, Greentown agreed to sell shares and convertible bonds worth HK$5.1 billion or $658 million to Wharf, the report said.
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