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Jermajesty Holdings signs agreement on new Dalian Airport project
Published on Thursday, 07 November 2013 07:07
GoConnect Ltd has received advice from the corporate management of Jermajesty Holdings in China that a partnership agreement has been executed between Jermajesty Holdings, and Dalian Central City Property Development Co Ltd ("Dalian Central City"). In turn, to enlist the full support of the local government authority for the partnership and Jermajesty Holdings’ hospitality project, Dalian Central City has entered into a Memorandum of Understanding with Dalian State Owned Golden Bohai Coast Administration Committee ("Administration Committee"), (responsible for Dalian Jinbo Golden Coast Development Area incorporating the new Dalian International Airport under construction). GoConnect is a significant shareholder in Jermajesty Holdings with a 20% interest.
Under this agreement, Jermajesty Holdings, and Dalian Central City will establish an investment partnership based on the land that belong to Dalian Central City for a mixed use development, proposed by Jermajesty holdings of initially 400,000 sq meters, of hospitality and wellness, entertainment, retail, serviced apartments, and other complementary properties ("the Project"). The size of the land is over 400,000 sq meters. Dalian Central City will provide the land as
equity contribution to the partnership while Jermajesty Holdings will be responsible for securing international investor capital for the development. Dalian Central City, with the support of the Administration Committee, will proceed to secure the early and necessary government approvals for the development. Jermajesty Holdings will also have a 20-year operational right for a 5 star deluxe hospitality property to be developed within the Project.
The Project is within 5 minutes by car to the new Dalian International Airport currently under construction. With a planned annual passenger handling capacity of 70 million and four runways, Dalian's new international airport is expected to be the largest offshore airport in the world, as stated by Cai Li, chairman of Dalian International Airport Co Ltd, which is the operator of Dalian Zhoushuizi International Airport (DLC). Located in Jinzhou Bay, the new airport is to be built on an offshore man-made island by reclamation. It is estimated to cover an area of 20.87 sq kms at a cost to the government of 26.3 billion yuan (A$4.54 billion). The new airport will be 7 times of DLC and is scheduled to be completed in 5 years. The construction of the new airport is progressing steadily, and reclamation work will be completed in 2013. The new Dalian International Airport will have annual passenger capacity comparable to Beijing International Airport, current annual capacity 75 million passengers, and Shanghai Pudong International Airport, current annual capacity 60 million passengers. The new Dalian international airport will be able to receive flights directly from West Coast US and Europe enabling Dalian to become an international air traffic transit hub into various major China cities such as Beijing and Shanghai.
The current corporate plan of Jermajesty Holdings and after finalisation of the partnership structure is for Jermajesty Holdings to retain at least 50% of the Project. Jermajesty Holdings
will secure international investor funds, including that from the Jermajesty Hospitality REIT being developed, to provide equity for the Project's development finance. These funds together with the land value are expected to provide sufficient equity for the Project to secure development finance, while Dalian Central City and the Administration Committee will assist in securing additional local bank and contractor finance for the Project.
With the Project's close proximity to the new international airport, other major commercial developments including a 600,000 sq meters super retail mall under construction, and a
Fisherman's Wharf project, the value of the Project on completion and the value-add by the Project to Jermajesty Holdings will be substantial. Mr Prarob Mokaves, Consultant and Group CEO designate of Jermajesty Holdings, formerly President-Development of Dusit Thani Group, and Kempinski Hotels & Resorts, and who has 38 years experience in hospitality management, an expert in hospitality development, will be visiting and inspecting the Project next week. GoConnect's 20% interest in Jermajesty Holdings is fast translating into a significant asset for the company.
