Friday 29 Mar 2024
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SINGAPORE (April 4): The share prices of KSH Holdings, Lian Beng Group, Heeton Holdings and Oxley Holdings sprung to life on Tuesday after news broke that a “1,000 year” Special Economic Zone (SEZ) would be sited right next to their joint-venture development in Hebei province.

Called the Sino-Singapore Health City, the development is located in Gaobeidian, some 82 km south-east of Beijing, and a stone’s throw away from China’s newest SEZ.

On April 1, the Chinese government announced that it would recreate the Xiongan new area, Xiongxian County in Hebei into a “1,000 year” SEZ, similar to that in Shenzhen and Pudong, Shanghai. Xiongan is 100 km south-east of Beijing.

Hordes of speculators promptly poured into the province such that the Hebei government had to halt property transactions in Xiongxian county on Sunday.

The Chinese press reported that resale properties that used to sell for RMB4,000 psm (S$811 psm) in nearby areas in Hebei have doubled to RMB8,000 psm.  Properties in Baoding, Hebei, were reported to be selling at RMB18,000 psm.

In 2014, Oxley Holdings, along with KSH, Heeton and Lian Beng formed a joint venture with a Chinese partner to develop the Gaobeidian project with an initial investment of RMB450 million.

Oxley originally had a 20% stake but raised it to 27.5%, and now holds the largest share in the project. KSH holds 22.5% while Lian Beng and Heeton holding 7.5% and around 5% respectively.  

The project comprises a 393,335 sqm site and allowable gross floor area of 1,234,006 sqm.

KSH announced in its FY2016 annual report that construction for Phase One started in June last year and should complete in 24 months.

Phase One consists a 40,000 sqm commercial belt, 1,600 mass-market residential units estimated to be priced at RMB4,000 to RMB5,000 psm, and 1,450 high-end residential units estimated to be priced at RMB7,000 to RMB8,000 psm.

“We are launching Phase One soon,” says Ching Chiat Kwong chairman of Oxley Holdings.

Analysts have estimated that the land price of the Sino-Singapore Health City have surged so much that its valuation is 120% the market cap of KSH at S$278 million. By comparison, Oxley Holdings’ market cap is S$1.7 billion.

On Tuesday, shares of KSH closed 8.5 Singapore cents higher at 63.5 Singapore cents; shares of Lian Beng closed 7.5 Singapore cents higher at 61.5 Singapore cents; shares of Heeton closed 2 Singapore cents higher at 39.5 Singapore cents while shares of Oxley closed 2.5 Singapore cents higher at 58.5 Singapore cents.

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