Chun Wo Development : to Acquire 90% Equity Interests in China City Construction (Zhuhai) for RMB315 Million
Chun Wo Development Holdings Limited has announced that it will acquire 90% equity interest in China City Construction Holding Group (Zhuhai) Property Co., Ltd. (“China City Construction (Zhuhai)”) at a total consideration of RMB315 million. The key asset of China City Construction (Zhuhai) is mainly a parcel of land located to the south of Haizhou Road and the east of Jiuzhou Avenue East, in Jida, Xiangzhou District, Zhuhai City, Guangdong Province, the PRC, with a total site area of nearly 10,000 sq. m. The parcel is to be developed into a commercial building with a GFA of approximately 101,136 sq. m. China City Construction Holding Group Co., Ltd. (“China City Construction”) holds a 25% equity interest indirectly in China City Construction (Zhuhai) and is its single largest shareholder.
China City Construction is a national grade enterprise principally engaged in urban development, investment and construction projects in China. Its extensive experience encompasses property development and operation, construction, decoration and renovation, road and bridge construction, landscape and greening projects, piping engineering projects, waterwork engineering projects, and investigation and design works and it has obtained approval to import and export construction materials in China.
As the strategic shareholder, China City Construction had collaborated with the Group to secure a tender for a parcel of land located at Yiu Sha Road, Whitehead, Ma On Shan. Both parties are planning to co-develop a commercial property project in Zhuhai. The transaction and joint project planning strongly demonstrate the complementary development and operational philosophies of the two parties.
Mr. Dominic Pang, Co-Chairman of Chun Wo, said, “The Group is excited about the closer strategic partnership with China City Construction. We believe that the collaboration will further strengthen the Group’s shareholding structure and increase the scope for development of our business. The smooth cooperation experience between Chun Wo and China City Construction in the past together with the strengths of both parties in infrastructure, property development, property management and security services enables both of us to explore together potential development opportunities in China and in overseas markets.”
The Zhuhai development project to be acquired possesses good locational advantage and is situated in a prime business location within the Pearl Delta River region. It is near Jiuzhou Port and takes only five minutes ride by car. It also takes a car ride of only eight to 10 minutes to the Hong Kong-Zhuhai-Macao Bridge. The commercial building project is surrounded by the sea on three sides with a sea view on the Pearl River Estuary as well as a panoramic view of Taipa in Macau and South Lantau Island in Hong Kong.
The supply of grade A commercial buildings in the market is relatively scarce. Together with closer transport links and more frequent business and trade activities in the Pearl River Delta region, the demand for grade A commercial buildings in the region is expected to increase continuously. Upon completion scheduled in the first half of 2016, the new building is expected to contribute cash flow and revenue to the Group afterwards. WFC is the grade A commercial building in the vicinity and its selling price per sq. m. is RMB27,000.
Mr. Pang concluded, “We think that the investment has good potential and will present opportunities to the Group to build a property development business in alignment with the Group’s development strategies. As several cooperative projects are currently under negotiation between Chun Wo and China City Construction, we believe there will be greater cooperation between the two parties in the future.”