First Sponsor unit sells part of Chengdu mixed-used project for S$97.5m

MAINBOARD-listed First Sponsor Group's unit Chengdu Gaeronic Real Estate Co is selling parts of a mixed-used residential and commercial project, Chengdu Cityspring, for 465.0 million yuan (about S$97.5 million).

The buyer is Chengdu-based hotel, real estate and finance company Minyoun Industrial Group Corporation.

Chengdu Cityspring comprises six residential buildings, four commercial buildings and 1,272 basement car park lots.

The sale involves one of the commercial buildings, a retail space and 318 basement car park lots.

The property is owned by Chengdu Gaeronic Real Estate Co under a leasehold which expires in March 2049.

M Hotel Chengdu, a 196-room four-star hotel, occupies parts of commercial buildings. Other than M Hotel Chengdu and the car park lots, the rest of the property is commercial space in a bare shell condition.

In an exchange filing on Monday, First Sponsor Group said the sale is a good opportunity to dispose of an underperforming asset at a profit.

The sale will also further strengthen its balance sheet, added the property group, whose key shareholders are City Developments Limited and Tai Tak Estates Sdn Bhd.

The sale price represents an excess of 102.9 million yuan over the net book value of the property as at March 31, 2018. The company intends to use the net proceeds of about 396.7 million yuan to fund its existing operations in China.

The group will continue to own the 458-room Crowne Plaza Chengdu Wenjiang Hotel and the 150-room Holiday Inn Express Chengdu Wenjiang Hotspring Hotel, "whose performances have been encouraging".