Proceeds from sale of eight floors will be used for expansion and to reduce debt Cosco International Holdings has sold eight office floors at its flagship Cosco Tower in Sheung Wan to its parent firm for $1.4 billion. The company said it would use the proceeds from the sale for expansion of its shipping operations and to reduce debt. The sale, which totals 172,660 square feet, includes the 39th, 40th, 42nd and 47th to 51st floors in the 52-storey building. Cosco International bought the eight floors from parent company Cosco Hong Kong for $1.66 billion in April 1998. The latest transaction value translates into an average price of $8,120 per square foot, which property consultants said was in line with market prices. Chartersince Surveyors associate director Desmond Poon Chi-ming said an entire office floor on the upper levels of Shun Tak Centre, also in Sheung Wan, recently sold for $7,900 per square foot. 'The price is reasonable, taking into account the latest transaction records,' Mr Poon said. However, agents said it was not easy to find contiguous floors available in prestige buildings in the area, and that Cosco Hong Kong would have been hard pressed to acquire the property had the owner not been a connected firm. Liu Guoyuan, the president of Cosco Hong Kong and a vice-chairman of Cosco International, said the sale would bring in a considerable amount of cash, which would be used to finance the development of core business operations. 'This will pave the way for acquiring more quality and potential assets in ship trading and supply services,' Mr Liu said. The sale would also lower Cosco International's debt ratio to about 40 per cent from 56 per cent now, he said. After the completion of the transaction, Cosco International will lease back some office space in the building at a monthly rate of $25 per square foot for an initial term of three years, with an option to renew for a further three years. The transaction is one of the latest bulk sales of office space this year. Early this month, it was reported that Morgan Stanley sold Vicwood Plaza in Sheung Wan for $2.5 billion.