Chiwayland’s maiden project in central China is strategically located in Jianghan, one of the busiest districts in Wuhan, the most populous city in central China. Photo: Wuhan Jianghan Municipal Government

CHIWAYLAND INTERNATIONAL is expanding its presence into central China in a joint venture to develop real estate in Wuhan.

The Group’s footprint in China has in the past been concentrated in the east coast. It has completed 9 property developments in the Yangtze River Delta, including Shanghai, Suzhou, Wuxi, Zhangjiagang and Xuancheng.

Wuhan is the capital of Hubei province and the most populous city in central China. Jones Lang LaSalle has identified Wuhan as one of nine Tier 1.5 cities -- commercial powerhouses serving huge regional catchments of businesses and consumers. (The other eight cities are Chengdu, Tianjin, Nanjing, Shenyang, Chongqing, Suzhou and Hangzhou and Xi’an.)

Wuhan's property market is hot: Last month, the gross floor area of Wuhan condominiums transacted increased 53.5% year-on-year to 2.78 million sqm. The average selling price of condominiums rose 8.1% year-on-year to Rmb 9,021 per sqm.

 

QianJianRong
“This joint venture allows us to enter Wuhan’s real estate market, which is geographically new to us, and to gain experience in developing energy efficient homes there.”

- Qian Jianrong
Executive Chairman

“We are seeing increasing segmentation of the property markets in China. Economically vibrant cities are moving ahead, while others are stagnating due to over-supply. Cities which offer good economic prospects are attracting new immigrants and overseas returnees.

"Population growth will continue in these cities, leading to steady demand for housing and other amenities, such as schools and local malls," said CEO Qian Jianrong.

On Thursday (28 July), Chiwayland’s subsidiary, Suzhou Chiway Shangcheng Real Estate Co Ltd (Suzhou Chiway), entered into a joint venture agreement for a high-end residential development with Modern Green Development Co Ltd (Modern Green).

Modern Green is a wholly-owned subsidiary of Modern Land (China), an established real estate developer listed in Hong Kong that specialises in energy efficient homes.

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Modern Green’s wholly-owned subsidiary, Shengeng Hongye Development (Beijing) Co Ltd, was recently awarded the tender for a 13,270 sqm land parcel in Wuhan’s core urban core district in Jianghan. The land parcel has been a plot ratio of 3.0.

Suzhou Chiway will use internal cash resources to contribute Rmb 4.9 million for a 49% stake in the JV while Modern Green will contribute Rmb 5.1 million for a 51% stake.

The Group's project launch pipeline this year includes four new projects in Suzhou and one in Nanjing with a total gross floor area of 233,038 sqm and a gross development value of RMB 6.1 billion.


♦  Global property player in the making

The Group's strategy is to become a global property player with at least half of its revenue derived from outside China within the next five years. It is seeking shareholders' approval at its EGM next month to expand in North America, Western Europe and Asia.

In 2014, the Group forayed into Australia and successfully completed and handed over its first project there (Vivir in Brisbane) in 1Q2016. Its largest residential project in Australia (32,545 sqm of gross floor area in Parramatta, Sydney) is on track for completion in 2019. It now has two real estate projects in Brisbane and four in Sydney.

This year, the Group forayed into the North American real estate market with a mixed development project in Los Angeles, California --- Urban Commons LLC, comprising of retail, hotel and residential units.

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