Hong Kong’s Shui On buys two Shanghai office towers despite earlier disposals

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The company says it won a tender to buy two office buildings for US$173m on the same day it announced the disposal of prime Shanghai assets for US$630m

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Shui On Land, which is pursuing an “asset-light strategy” said on Wednesday it had won a tender to buy two office buildings in Shanghai. Photo: Xinhua

Eric Ng

Published: 9:20pm, 20 Dec 2017Updated: 9:20pm, 20 Dec 2017

Shui On Land has won a tender to buy two office buildings in Shanghai for 1.14 billion yuan (US$173 million), on the same day it announced it would sell half of its stake in a prime Shanghai multi-purpose property project as part of its “asset-light strategy”.

The deal reflects the company’s commitment to office development in prime locations despite the disposals of major property assets in China to reduce debt.

The company won the tender, which closed on Tuesday, to buy the Jianfa Junyi buildings in Yangpu district in the northeastern section of downtown Shanghai, it said in a filing to Hong Kong’s stock exchange on Wednesday.

“With the geographical proximity of the property to the KIC project of the company, the acquisition expands and strengthens the KIC brand, and increases our office portfolio in this upcoming and maturing office sub-market in Shanghai,” the company said.

KIC refers to the “Knowledge and Innovation Community” project in Yangpu, a bundle of properties comprising retail, office, hotel, car park spaces and a clubhouse.

“It also fits well into our new long-term strategy in expanding the company’s presence in the Shanghai office market,” it added.

The Jianfa buildings have a total saleable gross floor area of 45,298 square metres. Construction was completed in September this year and final inspection of the buildings are expected to be finished by the end of the year.