Tuan Sing takes 75m yuan stake in Hainan mixed-use development project

MAINBOARD-LISTED real estate player Tuan Sing Holdings has taken a stake in a mixed-use development project in China's island province of Hainan, it said on Monday.

The group has paid 75 million yuan (S$15 million) for 7.8 per cent in Hainan-based Sanya Summer Real Estate, which is controlled by mall developer and operator Hainan Summer Property Development Ltd.

Sanya Summer Real Estate plans to build a complex with commercial, residential, hotel and retail components near the Sanya High-Speed Railway Station in Hainan by end-2021.

The complex - which will have a saleable and leasable area of about 2.6 million square feet - comes at a development price tag of 1.6 billion yuan and a gross development value of five billion yuan, Tuan Sing said. It is slated to include an internal shopping street, hotel apartments, an event hall, a cinema and a long-distance bus interchange hub.

Tuan Sing noted that it could raise its stake in the mega-project through its SP Corp listed subsidiary, if the shareholders of that unit agree to repay a S$20 million loan through the issuance of new Sanya Summer Real Estate shares.

SP Corp disclosed in a separate announcement that an indirect, wholly owned subsidiary entered into a loan agreement for that sum on Monday with Nuri Investments (S), in an interested person transaction.

The loan, which has an interest rate of 7.5 per cent per annum, is due in one year - or on a later date, as agreed in writing - in cash or any other repayment method that the parties agree on.

"In this regard, the company (subject to its shareholders' approval, if required) is given an opportunity to participate in the five billion yuan Sanya integrated development project by electing to be repaid in new shares to be issued in the capital of Sanya Summer Real Estate," said the SP Corp board.

Michelle Liem, a deemed substantial shareholder of SP Corp and a relative of three directors, is also a director and shareholder of Nuri. Her brother, Tuan Sing chief executive William Liem, is a director and shareholder of Nuri, while her husband, SP Corp director David Lee, is also a director of Nuri.

Mr Liem said in a media statement: "Given the huge potential of this project, we believe that it is in the long-term interest of the group to increase our stake in due course.

"For years, we have had a presence in China but this investment will serve to give us a foothold to tap on the rapid pace of growth in Hainan, as well as the growing affluence within Sanya.

"As one of the first foreign developers to embark on such large-scale projects in Hainan, we are well placed to benefit from the tourism boom and the government's favourable development initiatives for the province."

He also said that the group "will continue to identify suitable opportunities to grow our portfolio of strategically located assets, and explore meaningful partnerships and collaborations so as to enhance and diversify our revenue streams" in a bid to build its regional footprint.

Tuan Sing went into the midday trading break flat at S$0.39, before the announcement, while SP Corp was unchanged at S$0.80.