Keppel Land China’s wholly-owned subsidiary, Shanghai Fengwo Apartment Management, has formed a joint venture with Gemdale and Shenzhen Shengjun Investment Management to own and develop an 8.4-hectare residential site in the Jiading district in Shanghai.

The joint venture is in line with Keppel Land China’s strategy to deepen its presence in Shanghai, which is one of its focus cities in China, says the company in a statement on Dec 23.

The site enjoys close proximity to a Metro Line 11 station and can yield over 1,600 residential units.

The site is owned by a wholly-owned subsidiary of Taicang Zhuchong Business Consulting (JVCo).

Under the terms of the venture, Shanghai Fengwo has subscribed for a 99% equity interest in Taicang Xinwu Business Consulting, a wholly-owned subsidiary of Gemdale, for RMB9.9 million ($2 million).

It has also acquired the remaining 1% equity interest from Gemdale Shanghai for RMB1 in cash.

SEE: Keppel Land divests 100% interest in First King Properties for $131.1 mil

Taicang Xinwu holds a 15% stake in the JVCo, and Gemdale and Shenzhen Shengjun hold indirect interests of 55% and 30% in the JVCo respectively.

In connection with the acquisition, Shanghai Fengwo has extended loans amounting to RM648 million to Taicang Xinwu, which has been used for the acquisition and development of the site.

The consideration amount was arrived at on a willing buyer, willing seller basis, which took into account the adjusted net asset value of Taicang Xinwu’s interest, based on the agreed value of the site attributable to its interest, which was some RM658 million as at Dec 15.

Tham Sai Choy, a director of Keppel Corporation, has a shareholding interest of less than 1% in Shenzhen Shengjun Investment Management.

Temasek Holdings has a deemed interest in 2% of Shenzhen Shengjun Investment Management through its subsidiaries and associated companies.

As at 9.14am, shares in Keppel Corp are trading 1 cent higher or 0.2% up at $5.38.