A 50/50 joint venture between Henderson Land Development Co. Ltd. and Lai Sun Development Co. Ltd. is divesting the No. 8 Observatory Road commercial property in Kowloon, Hong Kong, to Treasure Ascend Global Ltd. for HK$4.10 billion.
The joint venture signed the conditional agreement for the sale July 27. It will entail the disposal of all the joint venture's shareholding in Best Value International Ltd., the owner of the entities that hold the rights over the property.
Located in the Tsim Sha Tsui district, the 19-floor 8 Observatory Road has a gross area of approximately 183,400 square feet. It provides spaces for retail, dining and office use and will be professionally managed by Jones Lang LaSalle, according to the property's website.
From the sale, Lai Sun Development is expecting an estimated gain of HK$235 million, which will be used to fund its working capital and for general corporate expenditures.
Shareholders of Lai Sun Garment (International) Ltd., a majority shareholder of Lai Sun Development, need to approve the deal in order for the transaction to push through.
In other news, Lai Sun Development's Hibright Ltd. subsidiary agreed to provide an up to HK$700 million term loan facility to media and entertainment company eSun Holdings Ltd., a company that is also connected to the developer. The facility, which will be used to finance existing bank loans and general corporate requirements of eSun, carries an annual interest rate equivalent to the Hong Kong Interbank Offered Rate plus 3.3%, according to a filing.