Chinese Estates builds reserves with sale of stake in Jiangsu joint venture
Developer is selling off non-core assets to raise cash, as revenues are expected to be hit as a result of corruption case in Macau
The company paid the same price to buy into the venture in June last year. In a statement to the stock exchange yesterday, Chinese Estates said it expected to book a loss of about HK$10.5 million on the transaction when it is completed.
The developer sold its 49 per cent interest in the venture to an investment fund managed by the Sparx Group. Under the sale and purchase agreement, the investment fund must pay cash of US$200 million and issue a loan note for US$300 million to Chinese Estates.
The Jiangsu project is in the southeastern outskirts of the Yin Xing Ken district in Qidong city and has a site area of 1.34 million square metres. The site could be developed into a residential, business and resort project with a total gross floor area of 1.58 million sq metres.
The construction of the first phase of the project has started, and it was launched for sale in July.
Alan Chiang Sheung-lai, head of residential property on the mainland at consultancy DTZ, said developers' expectations about property price growth had changed from a year ago.