Alpha Investment Partners and Keppel Land China, the subsidiaries of Singapore-based Keppel Group, have divested their 80 percent stake in a Shanghai commercial complex to the Chongbang Group for $516.9 million.
Alpha Investment Partners, Keppel Corporation’s real estate fund management platform, had a part ownership in the Life Hub in the Pudong district of Shanghai via its Alpha Asia Macro Trends Fund II. The fund, which raised $1.65 billion in 2013, and a co-investor jointly owned a 57.5 percent stake.
“With value-adding efforts we have been able to realise an internal rate of return of over 20 percent on the sale of the development,” said Christina Tan, chief executive officer of Keppel Capital and managing director of Alpha. “This is testament to our ongoing efforts in ensuring that our investment discipline achieves the best returns for our investors.”
The Life Hub is a mixed-use development that has approximately 1.2 million square feet of retail shops spread over 10 buildings along with a 10-storey office tower with a retail podium. The retail mall is said to be 97 percent leased while the tower is fully occupied, according to a company statement.
Meanwhile Keppel Land China holds the remaining 42.5 percent stake in the asset. Once the deal is completed by end September the entire Keppel Group would recognise a gain of S$73 million ($53 million; €48 million).
“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,” said Ang Wee Gee, chief executive officer of Keppel Land.
Following the deal the Shanghai-based developer, owner and operator of retail-anchored mixed-use projects Chongbang, and its subsidiaries, now own 100 percent of the property.