Keppel Corp divests 80% stakes in Chinese retail mall for $704.1m

The group is recycling assets to generate more returns.

Keppel Corporation Limited’s subsidiaries, Keppel Land China Limited and Alpha Investment Partners, signed an agreement to dispose a total of 80% stake in Sparkle Bright Holdings Limited (Sparkle Bright), which owns Life Hub @ Jinqia, a mixed-use development in Shanghai, China.

Keppel Corp said the total consideration of the divestment is S$704.1 million (US$516.9 million). Keppel Land China holds a 42.5% interest, while Alpha Asia Macro Trends Fund II and a co-investor owns the remaining 57.5% interest in the 80% stake in Sparkle Bright.

“Keppel Land China’s collaboration with Alpha reflects how different business units are working closely together to harness the collective strengths of the Keppel Group. The divestment is in line with Keppel Land’s strategy to continually recycle assets to seek higher returns,” Ang Wee Gee, CEO of Keppel Land.

Since the acquisition of Life Hub in 2013, Keppel Land China and Alpha have been working with the mall operator to continuously enhance the tenant mix and shopping experience. The retail mall is currently 97% leased while the office tower is fully occupied.

The divestment is expected to be completed by end-September 2016. The Group expects to recognise a gain of approximately S$73 million from the divestment.