GuocoLand to sell Shanghai building at post-tax loss in 610m yuan deal

MAINBOARD-LISTED developer GuocoLand is selling a building in Shanghai in a loss-making deal inked on Wednesday, the company has disclosed.

Wholly-owned Shanghai Xinhaolong Property Development Co will sell the former Guoson Mall, which is part of the Guoco Changfeng City project, for 610 million yuan (S$124.3 million) in cash to third-party buyer Shanghai Changfeng Investment (Group) Co.

While the property had a net book value of roughly 576 million yuan as at Aug 31, GuocoLand said in its bourse filing that it expected to recognise a net loss of about S$13.5 million on the back of taxes from the transaction.

Its price tag, which will be paid in three tranches, was reached at arm's length on a willing buyer, willing seller basis, said GuocoLand.

The property in the Putuo district comprises a cultural centre of about 31,400 square metres and an underground commercial area of some 8,000 sq m. Guoco Changfeng City is a mixed-use office and retail development, with a gross floor area of more than 195,000 sq m, slated for completion in 2021.

The counter added S$0.01, or 0.68 per cent, to close at S$1.48 on a cum-dividend basis, before the latest announcement.