SINGAPORE (April 4): The share prices of Oxley Holdings, KSH Holdings, Lian Beng Group and Heeton Holdings sprung to life on Tuesday after news broke that China's latest Special Economic Zone (SEZ) -- three times the size of New York City -- would be located right next to their Sino-Singapore Health City joint-venture development in Gaobeidian, Hebei province.

On April 1, the Chinese government announced it would create the Xiongan New Area in Hebei into an SEZ similar to that in Shenzhen and Pudong.

Gaobeidian lies between the SEZ and Beijing and is 82 km or 19 minutes by high-speed rail from Beijing. It is also 68km north of Baoding, which has been designated as China’s secondary capital and taking over part of the administrative function from Beijing.

In 2014, Oxley, along with KSH, Heeton and Lian Beng formed a joint venture with a Chinese partner to develop the Gaobeidian project with an initial investment of RMB450 million.

Oxley originally had a 20% stake but raised it to 27.5%, and now holds the largest share in the project. KSH holds 22.5% while Lian Beng and Heeton holding 10% and 7.5% respectively.

Sino-Singapore Health City comprises a 393,335 sqm site and allowable gross floor area of 1,234,006 sqm. The township development will be able to accommodate 50,000 households.

According to KSH, Phase 1 of its Gaobeidian project comprises 5,540 luxury and mass market residential units with saleable area of 615,438 sqm, and commercial development of 27,500 sqm in saleable area.

Following the announcement, local media reports claimed property prices nearly doubled.

Caixin, the Beijing-based financial and business news, reported residential prices in places like Baoding shot up from RMB6,000 psm to RMB20,000 psm.

Local property agencies were also forced to close on Monday after the government introduced an emergency sales ban in response to a surge in interest.

The surge in property prices in Hebei and Sino-Singapore Health City is also likely to add significant value to the net asset values of the four JV partners even with the top-tier land appreciation tax of 60%.

According to market watchers, the earnings from the residential portion of Phase 1 alone would add $159 million to KSH’s earnings, and boost NAV by 35 cents per share. And although Oxley would get a $195 million boost, it would add just seven cents to NAV. Lian Beng’s NAV would get a 17 cents lift, and Heeton 16 cents.

On Tuesday, shares of KSH closed 8.5 cents higher at 63.5 cents; shares of Lian Beng closed 7.5 cents higher at 61.5 cents; shares of Heeton closed 2 cents higher at 39.5 cents while shares of Oxley closed 2.5 cents higher at 58.5 cents.