Exclusive | Shui On in talks to sell half its Ruihong project in Shanghai
The sale, for an estimated 8 billion yuan, is part of Shui On chairman Vincent Lo’s ‘asset-light’ strategy since 2015 to pare the developer’s debt
Shui On Land, the developer that pioneered China’s heritage landmarks with its Shanghai Xintiandi project, is in talks to sell up to half of the latest development of its Ruihong Xincheng mixed residential and commercial project to pare down its debt.
A memorandum of understanding has been signed with a buyer for 50 per cent of Shui On’s four Ruihong sites for an estimated eight billion yuan (US$1.16 billion), according to two sources familiar with the matter. China Vanke, the country’s second-largest developer, may be the potential buyer, according to agents familiar with the sale.
With a debt-common equity ratio of 123.8 per cent, Shui On has been selling off assets since 2015 to reduce debt, part of chairman Vincent Lo Hong-sui’s “asset-light” strategy, according to his interview in the March issue of The Peak magazine. The Peak is published by the South China Morning Post.
Vanke’s executives were not available to comment on Sunday. Shui On’s spokesman declined to comment.
“Shui On is trying to increase shareholders’ value by disposing of some profit-making projects,” said Lina Wong, managing director of Colliers for east and west China. “Many developers have showed interest [in the Ruihong project].”
The Ruihong project, located at Shanghai’s golden triangle area between The Bund waterfront, the northern Bund and the Lujiazui business district, has 1.74 million sq metres of proposed gross floor area.
