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First Sponsor Group’s indirect wholly-owned subsidiary, Chengdu Gaeronic Real Estate Co, has agreed to sell parts of its mixed-use project Chengdu Cityspring for 465.0 million yuan (about S$97.5 million).
Chengdu Cityspring comprises four commercial buildings, six residential buildings and 1,272 basement car park lots.
Chengdu-based hotel, real estate and finance firm Minyoun Industrial Group Corporation agreed to purchase one of the commercial buildings, a retail space and 318 basement car park lots.
In an SGX filing, First Sponsor revealed that the property is owned by Chengdu Gaeronic Real Estate Co under a leasehold tenure expiring in March 2049.
M Hotel Chengdu, which is a 196-room four-star hotel, occupies parts of the commercial buildings. “Other than M Hotel Chengdu and the car park lots, the rest of the property comprises commercial space in a bare shell condition,” it said.
First Sponsor considers the sale “a good opportunity for the company to dispose an underperforming asset at a profit”. It will also strengthen the balance sheet of the group.
This comes as the disposal represents an excess of 102.9 million yuan (about S$21.6 million) over the property’s net book value as at 31 March 2018.
“The company intends to use the net proceeds of approximately 396.7 million yuan (approximately S$83.2 million) from the disposal (after taking into account estimated value added taxes, land appreciation tax, corporate income tax, related professional fees and other associated transaction costs) to fund its existing operations in China,” noted First Sponsor.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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