Hopson to sell stake in Shanghai project
Mainland developer Hopson Development Holdings has agreed to sell its stake in a prime commercial project in Shanghai for US$150 million amid the central government's new policy to curb foreign investment in real estate.
Hopson, whose projects are mainly in first-tier cities, said it would sell its indirect 50 per cent interest in Hopson International Tower project, which is on a 10,321 square metre site in Pudong New District, to Hong Kong-based property investor Pacific Delta Investments.
Hopson said it would book a gain of about $500 million from the deal, based on the project's 2.28 billion yuan valuation as of the end of last month made by DTZ Debenham Tie Leung.
The project, still being built, will become a 33-storey retail and office development with a gross floor area of 85,784 square metres. It is due to be completed by September 2008. It is now held by Interwell Developments, a 50-50 joint venture between Hopson and Union Wise Investment.
Hopson chairman Chu Mang-yee said in a statement that the proposed sale was in the best interests of the company's shareholders given the consideration represents a premium to the site's appraised value.
The developer's disposal plan came after the central government on Monday unveiled a set of new regulations to cool foreign investment in the property sector on concerns that overseas hot money was fuelling speculative activities.
The new rules, jointly issued by six central government ministries, require foreign institutions and individuals buying mainland property not for personal use to set up a mainland-registered company for the purchases.
They also include measures that require foreign-funded firms investing more than US$10 million in the property market to have registered capital of at least 50 per cent of their planned investment.
Previously, that percentage is believed to have stood at 33 per cent.
Shares of Hopson Development rose 2.96 per cent to close at $16 yesterday.