Dah Chong Hong sells two more buildings
DAH Chong Hong, the motor vehicle trading arm of parent CITIC Pacific, has sold two more properties to CITIC Pacific subsidiaries in the latest phase of the parent company's multi-billion dollar restructuring plan.
The transfer of the properties, worth a total of $1.34 billion, was revealed at the Land Office yesterday, and follows hard on the heels of Dah Chong Hong's earlier sale of a warehouse to CITIC Pacific for $450 million.
Market analysts have suggested that the restructuring is designed to pave the way for a separate listing for Dah Chong Hong.
However, CITIC Pacific managing director Henry Fan Hung-ling said the group had not yet decided whether Dah Chong Hong would be spun off.
He said there was no direct link between the transfer of properties and the listing consideration.
Dah Chong Hong Motor Service Building, with a total floor area of 270,850 square feet, at 25 Westlands Road in Quarry Bay, was sold for $1.13 billion to Pacific Grace Ltd.
Honest Motors Building, with a floor area of 47,487 sq ft, at 9-11 Leighton Road, was sold for $215 million to Wise Guide Development Ltd. Both buyers are subsidiaries of CITIC Pacific.
CITIC Pacific first confirmed in January that it was considering a separate listing for Dah Chong Hong.
Last year, its retail and motor trading business accounted for about 35 per cent of CITIC Pacific's net profit of $1.88 billion, which was up 81 per cent on 1992.
Prior to the latest property sales, Dah Chong Hong sold its warehouse in Cheung Sha Wan for $450 million to CITIC Pacific subsidiary Campbellton Development.
Mr Fan said these property transfers were part of a restructuring aimed at separating Dah Chong Hong's property portfolio from its core trading business.
He said it would streamline the operations of Dah Chong Hong in motor vehicle dealing and other areas.
There would be further transfers of property from Dah Chong Hong, he said, which would be grouped into a holding company under CITIC Pacific.
