Metro to invest S$41.7m in three China property developments

Mainboard-listed retailer Metro Holdings is expanding its property business in China.

The firm said on Friday that it is making an investment commitment of about S$41.7 million to acquire stakes in three developments in Anshan, Fushan and Qinhuangdao.

Metro’s wholly-owned subsidiary, Metro China, has set up a 21.4 per cent associated firm called Diamond Wind Company for the investment.

The balance 78.6 per cent of Diamond Wind is mainly held by an independent and unrelated party, controlled by a Hong Kong-based private property equity fund.

Diamond Wind is set up for the purpose of acquiring an effective 50 per cent of the issued share capital of Sunelite China Investment, Northeast Asia Investment & Development, and Tesco Anshan.

Diamond Wind will invest about US$137.8 million in the firms for the purpose of the development of three properties in Anshan, Fushun and Qinhuangdao.

Metro will hold a 10.7 per cent effective interest in the HK holding companies through Diamond Wind.

The project in Anshan is a mixed-use development with a five-level retail mall, residential and service apartment towers, while Fushun’s project comprises a mixed-use development with a retail mall of over five levels. The project in Qinhuangdao is a four-storey, two-basement retail mall.

Metro said the investment is in line with its stated intention to build its presence and investment in the region. It added that the investment will enable it to expand its property interests in China.

The company said its commitment will initially be funded primarily from internal cash sources.

Source : Channel NewsAsia – 13 Nov 2009