Leading Chinese property developer Sino-Ocean Group Holding Limited (“Sino-Ocean”; HKEx: 3377) and global investment firm KKR have entered into a definitive agreement to invest in China leading retail outlets developer and operator Beijing Capital Juda Limited (“Capital Juda” or “The Company”; HKEx: 1329) through a combination of new ordinary shares and perpetual convertible bond securities for a total consideration of HKD1,477 million (US$191 million).
Following completion of the transaction, Sino-Ocean will own an approximate 16% stake in Capital Juda and KKR will own an approximate 12% stake in Capital Juda, in each case on a fully diluted basis.
Capital Juda is a Hong Kong-listed subsidiary of Beijing Capital Land (“BCL”), a leading Chinese real estate developer listed in Hong Kong and controlled by Beijing Capital Group (“Capital Group”). The Company leverages on BCL’s experience and network in real estate development in China as well as its own expertise in commercial development and operations to focus on integrated outlets projects across China.
Sino-Ocean sees great potential for China’s outlets sector given the segment’s defensive fundamentals through economic cycles. It views Capital Juda and KKR as high-caliber partners with established track records that will further develop and grow its property businesses in China.
Beichen Zhong, Executive Director and CEO of Capital Juda, said, “Sino-Ocean and KKR are experienced investors in China’s real estate market and their investment in Capital Juda recognizes the future potential of China’s commercial real estate market, especially in the outlets sector. Combining their resources and extensive industry expertise with our experience in developing and managing outlets will bring along synergies to accelerate the development of the Company’s business.”
Rob Yang, Managing Director at KKR Asia, said, “Capital Juda is a leading real estate developer in China’s outlets space with a strong management team. We are excited about this opportunity and believe the sector will continue to benefit from a rising middle class, growing consumption and urbanization in China.”
The investment marks the second collaboration between Sino-Ocean and KKR, which first established a Chinese real estate joint venture in 2011.
KKR makes its investment from its China Growth Fund. The transaction is subject to customary regulatory and Capital Juda shareholder approvals.
The Hongkong and Shanghai Banking Corporation Limited is the sole financial adviser to Capital Juda.