Redco Properties Group Ltd. will sell its 100% interest in its unit Shanghai Mingchang Properties Ltd. to Shanghai Zhong Da Industry Development Co., Ltd., an unrelated third party, for about 671.8 million Chinese yuan.
The company attributed the sale to a temporary ban on the development of residential complexes in the Shanghai area. The unit owned approximately 9,941 square meters of land in the Yangpu district of Shanghai, on which the company had plans to develop serviced residential complexes.
The company did not consider the construction of commercial office space at the site owing to the longer construction period and slower recovery of investment, saying it would rather focus on its many residential properties under development, with comparatively shorter investment cycles.
The company intends to use the net proceeds for general corporate purposes, and the transaction is expected to complete within two days of the transfer of the interest.
As of Dec. 19, US$1 was equivalent to 6.60 Chinese yuan.