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Shui On, Link REIT ink deal
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SHUI On Land Ltd, controlled by Hong Kong billionaire Vincent Lo, and best-known for its Xintiandi series projects across Chinese cities, yesterday announced the en-bloc sale of two premium Grade A office buildings in Shanghai’s downtown Huangpu District.
It is the latest effort by the developer to seek sustainable growth.
Shui On’s indirect subsidiaries Interchina International Ltd and China Xintiandi Holding Co Ltd have entered into a sales-and-purchase agreement with Capital Gainer Ltd and The Link Properties Ltd, both indirect wholly-owned subsidiaries of The Link REIT. They will sell office and retail complex at Corporate Avenue 1 and 2 in Shanghai’s Xintiandi area for over 6.6 billion yuan (US$1.06 billion), the company said in a statement yesterday.
With a total leasable gross floor area of 83,155 square meters — 75,780 square meters of offices and 7,375 square meters of retail space — the properties were reportedly sold for an average price of 79,380 yuan per square meter.
“This is a reasonable price and the deal will help us accelerate our asset turnover and reduce our debt,” said Lo, chairman of Shui On Land. “It will also enhance our balance sheet and provide the company a better position to catch more opportunities for future growth.”
In three years, Shui On hopes to reduce its debt to assets ratio to 50 percent, Lo said without elaborating how much it is at the moment.
Net proceeds from the disposal, totaling 4.284 billion yuan, will be used to invest in Shui On’s projects in Shanghai.
The company is actively seeking new development projects across the city covering all types of real estate.
By the end of the year, Shui On hopes it will be able to secure several projects, Lo said.
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