Beijing Key International Hotels Management Co Ltd, Kempinski's joint venture in China, has signed a deal with Shanghai Xintai Real Estate Development Company to build a Kempinski hotel in the city that will open in 2009.

Xintai will fund the project while Kempinski will provide management, as well as branding and marketing services. Xintai estimated the hotel will cost US$246.9 million.

The German hotel group said it previously negotiated with several other real estate developers in Shanghai, but failed for various reasons.

Located along the Huangpu River, the 180,000-square-meter hotel will have a view of future Expo exhibition halls on both banks of the river. The project also features a 44-story office building to attract companies to the area.

With most of its projects conducted in northern China, Kempinski is focusing on the Yangtze River Delta for future expansion in the country.

The hotel group has hotels in Beijing, Dalian, Shenyang and Chengdu. With 11 others under construction, Kempinski plans to build up to 25 five-star hotels in the next five years.