Frasers Property enters joint venture to invest in China land plots

Chinese yuan (renminbi) notes. Photo by Eric Prouzet on UnsplashChinese yuan (renminbi) notes. Photo by Eric Prouzet on Unsplash

Frasers Property has entered a tie-up with a joint venture partner and its related entity to pursue potential investments in certain land plots in China, the Singapore-listed developer said in a filing to SGX Monday.

“The proposed investment would enable the group to form a strategic alliance with the JV Partners
and potentially jointly participate in other investment opportunities in the future,” Frasers Property said.

The Singapore-listed company will enter the joint venture via its indirect wholly owned subsidiary Suzhou Sing Heng Le Enterprise Development, or SHL, the filing said. 

Under the deal, SHL will provide funding of around CNY1.84 billion, or around S$394.41 million, toward the proposed investment, Frasers Property said. 

The joint venture parties plan to develop the land plots, with SHL to hold an indirect interest of up to 25 percent in the development joint ventures, the filing said.

In addition, Frasers Property, via another indirect, wholly owned subsidiary, Singlong Property Development (Suzhou), or SSL, has entered a loan agreement with one of the joint venture partners, the filing said. The agreement is for SSL to extend an interest-bearing bridging loan of CNY1.2 billion, or around S$257.16 million,  at 8.0 percent per annum, the filing said. 

The joint venture partner, which is not an interested person of Frasers Property, will use the loan proceeds toward payments related to the proposed investment, along with the amount invested by SHL, the filing said. 

If the proposed investment does not materialise, SHL will be entitled to a full refund, the filing said.