CLS Holdings Plc will sell its planned mixed-use Vauxhall Square development in London to Guangzhou R&F Properties Co. Ltd. for a gross total of about £157.8 million.
Under the agreement, CLS will fetch a net cash sum of £144.1 million and will hand over obligations for the relocation of the hostel at 62 Bondway to Guangzhou R&F. CLS will retain the freehold interest in the Miles Street student accommodation block and residential houses on Wandsworth Road.
Vauxhall Square, which CLS purchased nearly 30 years ago, was valued at £100 million as at Dec. 31, 2016. The company expects a profit from the sale of about £40 million after costs.
Henry Klotz, executive chairman of CLS, said in a release that the proceeds would be reinvested in high-yielding offices in key European cities.
The deal, which is expected to complete May 4, comes less than two weeks after the Chinese developer made its first U.K. property purchase, buying an asset that has the potential to be developed into an approximately £500 million residential project, according to a report by Property Week.