BUILDING LANDMARKS, CHARTING GROWTH
19
Annual Report 2015
Recent launch prices of new apartments and offices in
close proximity to our development have risen to as high
as RMB40,000 to RMB50,000 per sqm
5
.
Construction works at Beijing Tongzhou Integrated
Development have been progressing well, and three of
four construction-related regulatory permits have been
received. The development, expected to commence
operations in 2018, will benefit from the catchment from
the new Beijing Tongzhou Administrative Centre, which is
about three subway stations from our development, and
the surrounding areas.
Construction works at Xi’an North HSR Integrated
Development and Zhuhai Hengqin Integrated Development
are progressing well. The former has received two of four
construction-related regulatory permits and is expected
to commence operations in 2018/2019, whilst the latter
has received three of four permits and is expected to
commence operations in 2020.
Shenyang Longemont Integrated Development, the only
operational asset within our portfolio of China integrated
developments, has continued to improve operationally
despite the tough operating environment in Shenyang.
Shenyang Longemont Shopping Mall’s committed
occupancy was consistently over 90%, and continued
to register growing shopper traffic and tenants’ sales.
With the two master leases, Shenyang Red Star Macalline
Furniture Mall maintained its committed occupancy at
more than 93%, whilst the two office blocks at Shenyang
Longemont Offices registered a committed occupancy of
about 52%.
Perennial Qingyang Mall in Chengdu and Perennial
Jihua Mall in Foshan continued to perform well.
As at 31 December 2015, both malls registered a
committed occupancy of close to 100%, rising shopper
traffic and growing tenant sales. With the opening of
the Zhongba Subway Station, which is connected to
Perennial Qingyang Mall, in December 2015, coupled
with the trading of the new retail shops along the
pedestrian link way between the subway station and the
mall, Perennial Qingyang Mall is well-placed to entrench
its position as one of the most popular suburban malls in
western Chengdu.
Perennial Jihua Mall, which is expected to connect
seamlessly to the new Guilan Road Subway Station, will
also benefit from the recently announced construction of
the new Foshan Subway Line 6.
MALAYSIA AND GHANA
In the first half of 2015, we made our first foray into
Malaysia with our 50-50 JV with IJM Land Berhad to
acquire and develop a freehold waterfront site into a
large-scale integrated mixed-use development in Penang
of about 4.1 million sq ft of GFA at an estimated total
development cost of over MYR3 billion (approximately
S$1 billion).
In the second half of 2015, we made our maiden venture
into Africa with our 55-45 JV with Shangri-La Asia Limited
to develop a prime integrated mixed-use development
of about 1.7 million sq ft of GFA located in the Airport
district of Accra, the capital of Ghana. Perennial’s 55%
stake was acquired for a purchase consideration of
US$15.2 million (approximately S$21.4 million). The total
development cost for the project is estimated to be over
US$250 million (approximately S$352 million).
Our investment in Africa dovetails with our business
strategy to leverage on our sponsors’ experience
and network of relationships to achieve first mover
advantage in high growth emerging markets. Wilmar
International Limited (“
Wilmar
”) is one of Perennial’s
largest sponsors. For the JV in Ghana, Perennial will
benefit from Wilmar’s extensive knowledge, network
and resources in Africa, where it already has a strong
and established presence. The successful execution of
this signature Ghana project will also allow us to access
other African markets in the future.
For both projects, which will only be completed at least
three years down the road, we intend to adopt the strata
sale strategy to finance funding requirements so as to
minimise capital outlay and optimise cash flow.
5 Source: SINA LEJU (
/). Equivalent to RMB3,700 per sq ft to RMB4,600 per sq ft.
