Asset Acquisitions and Disposals::Proposed investment in a l...
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Asset Acquisitions and Disposals::Proposed investment in a leading operator of co-working spaces in the People's Republic of China
Issuer & Securities
Issuer/ ManagerCITY DEVELOPMENTS LIMITED
Securities CITY DEVELOPMENTS LIMITED - SG1R89002252 - C09 Stapled Security NoAnnouncement Details
Announcement TitleAsset Acquisitions and Disposals
Date & Time of Broadcast 19-Jan-2017 07:19:33 Status NewAnnouncement Sub Title Proposed investment in a leading operator of co-working spaces in the
People's Republic of China
Announcement Reference SG170119OTHRBNOL Submitted By (Co./ Ind. Name) Enid Ling Peek Fong Designation Company Secretary Description (Please provide a detailed description of the event in the box below)Please see attached announcement titled "(I) Incorporation of subsidiary, City Connected Communities Pte. Ltd. and (II) Proposed investment in a leading operator of co-working spaces in the People's Republic of China" together with a News Release issued by City Developments Limited on 19 January 2017.
AttachmentsCDL_Annc_19Jan17.pdf
CDL News Release.pdf Total size =94K
http://infopub.sgx.com/Apps?A=COW_CorpAnnouncement_...
19/1/2017
CITY DEVELOPMENTS LIMITED (Co. Reg. No. 196300316Z) Announcement on-
Incorporation of subsidiary, City Connected Communities Pte. Ltd.
上海办伴科技发展有限公司
- Proposed investment in a leading operator of co-working spaces in the People's Republic of China
The Board of Directors of City Developments Limited ("CDL" or the "Company") wishes to announce that its wholly-owned subsidiary, Singapura Developments (Private) Limited, has incorporated a wholly-owned subsidiary known as City Connected Communities Pte. Ltd. ("City Connected") on 8 November 2016.
City Connected has entered into joint venture documentation, including a capital increase and equity transfer agreement, in connection with its acquisition of a proposed 24% equity
stake in
(Shanghai Distrii Technology Development Co., Ltd), a
leading operator of co-working spaces ("Distrii") in the People's Republic of China, which investment will provide CDL with immediate entry into the rapidly growing co-working space sector.
Distrii is currently operating in Shanghai and has capacity for more than 2,200 members across nine different locations, with 80% of this capacity being taken up already. With the rising popularity of co-working facilities in many urban centres, Distrii will be opening a new facility in Beijing in 1H 2017 and plans to further expand in this city as well as in Guangzhou, Shenzhen and other global gateway cities. Distrii differentiates itself from other co-working operators through its industry leading technology platform which allows seamless collaboration and connectivity for their members throughout their network of locations.
华上住海投京资立(投上资海合)伙有企限业公(司有限合伙)
Marking its first international foray, Distrii will lease from a subsidiary of CDL more than 60,000 square feet of space at Republic Plaza Tower 1, a prime Grade A office building connected to the Raffles Place MRT Station in the heart of Singapore's Central Business District. Distrii's co-working facility at Republic Plaza is expected to open in 1H 2018 as the space is currently being leased out.
City Connected's proposed investment for the 24% equity stake in Distrii has been agreed at Renminbi Seventy Two Million (RMB 72 million or approximately S$14.9 million based on an exchange rate of RMB 4.83 to S$1.00) ("Investment"), which would be invested in tranches, subject to the satisfaction and/or waiver of certain conditions precedent for each tranche.
Following the acquisition of the interest in Distrii by City Connected, the registered capital of Distrii would be held jointly by the investment entity of Distrii's founder team, controlled by Dr
(50%), an investment arm of the Huazhu Hotels
Hu Jing,
Group,
(26%), and City Connected (24%).
The amount of the Investment was determined taking into account the net assets attributable to Distrii, current market prices of comparable platforms and the Company's assessment of the earnings potential of the joint venture. The Investment is expected to be funded via internal resources.
The proposed investment in Distrii is not expected to have any material impact on the net tangible assets or earnings of the CDL Group for the financial year ending 31 December 2017. The proposed Investment is expected to contribute to CDL group's long-term recurring income streams.
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City Developments Limited
None of the Directors or the controlling shareholders of the Company have any interest, direct or indirect, in the proposed investment in Distrii.
Further information on the Group's investment in "Distrii" can be found in the Company's press release issued on 19 January 2017, which is attached to this announcement.
By Order of the Board
Enid Ling Peek Fong Company Secretary Date: 19 January 2017
News Release19 January 2017
CDL INVESTS RMB 72 MILLION IN CHINA'S LEADING CO-WORKING SPACE OPERATOR DISTRII- Distrii to lease over 60,000 square feet of space at Republic Plaza, creating one of the largest co-working facilities in Singapore
City Developments Limited (CDL) has signed an agreement to invest RMB 72 million (approximately S$14.8 million1) for a 24% stake in Distrii, a leading operator of co-working spaces in China. Founded in January 2016, Distrii already has capacity for more than 2,200 members across nine locations in
Shanghai, with 80% of this capacity being taken up already. With the rising popularity of co-working facilities in many urban centres, Distrii will be opening a new facility in Beijing in the first half of 2017 and plans to further expand in this city as well as in Guangzhou, Shenzhen and other global gateway cities.
Marking its first international foray, Distrii will lease more than 60,000 square feet of space at CDL- owned Republic Plaza Tower 1, a prime Grade A office building connected to the Raffles Place MRT Station in the heart of Singapore's Central Business District. Expected to be one of the largest co- working facilities in Singapore, it will integrate food and beverage, entertainment, recreational and office facilities, leading a new trend in the co-working industry. Distrii's co-working facility at Republic Plaza is expected to open in 1H 2018 as the space is still currently leased out.
In 2016, prior to embarking on a joint venture with CDL, Distrii secured an angel investment from an investment arm of Huazhu Hotels Group (Huazhu). Nasdaq-listed Huazhu currently owns and operates over 3,000 hotels across 350 cities in China. Huazhu is founded by Mr Ji Qi, who within a span of 11 years also founded and listed Ctrip and Homeinns on the Nasdaq stock exchange.
Users of Distrii's co-working spaces include start-ups, small businesses, freelancers, independent contractors and frequent business travellers seeking to rent furnished and equipped spaces under flexible and cost-effective terms. These users are also attracted to the smart IT infrastructure, social and collaborative environment that co-working spaces provide. In addition to working alongside industry professionals and counterparts, users are invited to networking events organised by the operator.
Mr Sherman Kwek, CDL Deputy Chief Executive Officer, said, "In line with CDL's strategic diversification, we have been actively looking for innovative offerings and new growth platforms that are complementary to our core businesses of real estate and hospitality. With the burgeoning sharing economy, an increasingly mobile workforce and a greater requirement for flexibility, we see strong potential in co- working spaces and the demand for them has been rapidly growing. Our investment in Distrii enables us to immediately gain entry into the sector and will contribute to CDL's long-term recurring income streams. Through this strategic partnership, CDL will contribute not only capital but also provide our international market expertise to support Distrii's expansion both in China and on the global scene."
Dr Hu Jing, Distrii CEO, said, "The strong growth of the co-working spaces sector is expected to continue as companies and employees require more flexibility for their workspaces. In particular, for major cities in
1
Based on an exchange rate of RMB 4.85 to S$1.00
2 CBRE Research, August 2016: Asia Pacific Occupier Markets - The Rise of Co-working Space in Asia Pacific: Boon or bane?"
1
CDL - City Developments Ltd. published this content on 19 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 19 January 2017 01:01:03 UTC.
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