SHKP in $5.8b Tuen Mun venture with Transport International

Transport International (0062) and Sun Hung Kai Properties (0016) are to jointly develop a project in Tuen Mun at cost of HK$5.8 billion.

Under the agreement, Transport International will sell half of its stake in an industrial property in Tuen Mun, held by its subsidiary TM Properties Investment, to SHKP for HK$750.5 million.

On completion of the sale, the property will be jointly developed for offices, shop and services at an estimated cost of HK$5.8 billion, after obtaining the relevant lease-modification approvals.

The development costs will be equally borne by the vendor and purchaser.

Transport International, which is the parent of Kowloon Motor Bus, expects to realize a net gain of nearly HK$1.49 billion from the sale. Meanwhile, the group’s assets and liabilities would increase by HK$1.498 billion and HK$2 million respectively.

The property is located at Tuen Mun Town Lot No. 80, 1 Kin Fung Circuit, Tuen Mun.

It has a total gross floor area of around 105,364 square feet and is held under a government lease which restricts its use to industrial or godown purposes or both.

The net book value of the property was HK$1.9 million for the year ended December 31, 2019.