News Analysis: Foray into Xi’an
- Formed joint venture company to acquire a site in Xi’an for retail-led mixed-use development
- Total investment is estimated to be Rmb10bn
- Financially sound to pursue more acquisitions
A joint venture company formed by Swire Properties (70%) and Xian Cheng Huan Cultural Investment and Development Co. (30%) acquired a site in the Beilian District of Xian for Rmb2,575m. Located in the heart of downtown Xi’an, this retail-led mixed-use development is adjacent to the Small Wild Goose Pagoda (UNESCO World Heritage Site) and Xian Museum. This will be the fourth Taikoo Li built by Swire Properties in Mainland China. Upon the scheduled completion at end-2025, Taikoo Li Xi’an will offer retail and cultural facilities, a luxury hotel, serviced residences and business apartments. Total GFA is estimated 269,218sm (above and below ground) and total investment cost is projected at Rmb10bn.
Following this acquisition, Swire Properties’ gearing is expected to rise by 1ppt to c.5% which remains comfortable. Even allowing for the joint venture investment in Xian, the company remains financially sound to pursue more value-accretive acquisitions for long-term growth and raising the dividend to reward shareholders.
We have BUY rating on Swire Properties with HK$25.80 TP.