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SINGAPORE (Sept 2): Keppel Land China is expanding its presence in Beijing by acquiring 100% of the equity interest in Beijing Shunxiangren Enterprise Management Co., which indirectly owns the Shangdi Neo commercial property, for RMB178.6 million ($35.1 million).

Shangdi Neo is located within China’s Zhongguancun, or the so-called Silicon Valley, in the Haidian District.

The property will be occupied by co-working space operator Distrii, who will be its sole tenant. The five-storey development offers about 4,241 sqm of net leasable area.

Out of the total aggregate amount of approximately RMB178.6 million for the transaction, some RMB20.9 million is for acquisition of Beijing Shunxiangren, subject to completion adjustments.

The remaining RMB157.7 million will be extended as a loan to Beijing Shunxiangren to repay its outstanding debts.

Keppel Land China is a wholly-owned subsidiary of Keppel Land, the property arm of Keppel Corporation.

The company says the deal is not expected to have a material impact on the net tangible assets per share or earnings per share of Keppel Corp for the current financial year.

President of Keppel Land China, Ben Lee, says: "Following the acquisition of a commercial property in Beijing's Haidian District earlier this year, we are pleased to secure another prime commercial property in the same area. Keppel Land China will continue our strategy to grow our commercial portfolio in China, with a focus on high-growth cities such as Beijing.”

"With the low vacancy rate of offices in Zhongguancun, which stood at 1.5% as at end-2018, coupled with rapid growth of the technology sector, we are confident that our commercial development will meet the strong demand for quality office space in the Zhongguancun area," he adds.

As at 2.30pm, shares in Keppel Corp are trading 7 cents lower at $5.77.