The site at Xintiandi in Shanghai's Huangou district.

City Developments Ltd (CDL)—controlled by billionaire Kwek Leng Beng and his family—has partnered with Chinese state-linked Lianfa Group to purchase a prime mixed-use site in downtown Shanghai, reviving the Singapore developer’s bet in China’s troubled real estate market.

The duo is buying a 27,994-square-meter site in Xintiandi in Shanghai’s Huangpu district for 8.9 billion yuan ($1.3 billion). CDL’s Chenghong Shanghai will hold a 51% stake in the joint venture, while Lianfa Group will own the rest.

“The acquisition of this rare development site in Shanghai’s famous Xintiandi area represents the group’s confidence in China’s long-term growth prospects,” Sherman Kwek, group CEO of City........

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