Kardan NV (TASE: KRNV;AEX:KARD) today announced that its subsidiary GTC China has won a tender to acquire a 63,300 square meter plot of land in the Chinese city of Dalian with rights to build about 292,000 square meters. Kardan's real estate activities in China encompass 2.9 million square meters and Dalian will be the sixth Chinese city in which the Group operates.
The overall cost of the project in Dalian is expected to amount to about €315 million, of which the land will cost about €90 million.
Only last week Kardan NV, which is controlled by Joseph Greenfeld and Avner Schnur, completed the merger with its subsidiary Global Trade Centre Real Estate NV (GTC), which delisted from the TASE. GTC China is a subsidiary of GTC.
The planned project in Dalian will be located in the city's old port, which like Tel Aviv Port has the potential to become a major draw for tourism, leisure and commerce.
The project will be undertaken in two stages. The first stage, which should be completed by mid-2012, will include residential apartments, commercial areas above ground (about 55,000 square meters), an underground commercial center, and underground parking. The second stage of the project will include developing 30,000 square meters of commercial property, which will be built after 2012.
GTC will pay for the land in three stages. The first payment of about €19 million has already been deposited as part of the tender process. The second payment of about €26 million will be paid in December 2009, and the final payment will be made when construction on the land commences, which is not expected to be later than December 2010.
Financing of the first stage of the project will be undertaken by GTC China itself. At the same time, the company has had initial contacts with potential partners as well as local banks, which might support the project.
GTC China CEO Erez Applerot said, "Expanding operations to the city of Dalian is part of GTC China's strategy of investing in larger provincial cities which have higher than average growth in China. The current project is located in a central and developed city, and we are certain that it will be an attractive focus for homes and commerce. The conditions of purchase for the plot were achieved after protracted negotiations in full cooperation with the Dalian authorities and those conditions have improved significantly as a result of the crisis in the markets."
As of start of trade this morning Kardan NV's shares had a market cap of NIS 887.09 million, having lost 86.8% of its value since the start of the year.
Published by Globes [online], Israel business news - www.globes-online.com - on December 23, 2008
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