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Greentown, Wharf to Jointly Develop $424 Million Site

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Dec. 19 (Bloomberg) -- Greentown China Holdings Ltd., a property developer in the nation’s east, said it will join a venture to develop land in Hangzhou that shareholder Wharf Holdings Ltd. is buying for 2.58 billion yuan ($425 million).

The two companies will form a 50-50 joint venture to develop a 70,227 square-meter (755,917 square-foot) residential site in the Zhejiang provincial capital’s Xiaoshan district, according to a Hong Kong stock exchange filing yesterday evening. The partnership can build as much as 189,613 square meters of gross floor area on the land, it said.

“The co-investment pursuant to the framework agreement will broaden the asset and earnings base of the company and further strengthen the company’s position as a premier properties developer” in China, Greentown said.

The joint investment may help defray the costs of developing in Hangzhou, where the city government last month raised the minimum down payment required for second homes to 70 percent from 60 percent, part of an effort to control surging real-estate prices. New-home prices in the city increased 11.2 percent in November from a year earlier, accelerating from a 10.5 percent gain the previous month, according to government data this week.

Wharf, controlled by the family of billionaire Peter Woo, and its units own a 24.3 percent stake in Greentown, according to yesterday’s filing. Greentown agreed in June 2012 to sell HK$5.1 billion ($658 million) of shares and convertible bonds to Wharf.

Greentown gained 1.8 percent to HK$12.16 at the close in Hong Kong trading yesterday. The stock has slumped 14 percent this year, compared with the benchmark Hang Seng Index’s 2.2 percent gain. Wharf dropped 0.2 percent to HK$60.75.

To contact the reporter on this story: Joshua Fellman in New York at jfellman@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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