Sunday, June 26, 2022
Martin Hennecke

Kerry Properties sells two godowns for $4.6b
<p>Kerry Properties says it has entered into an agreement with China Resources Logistics to sell two warehouses for HK$4.62 billion.</p><p>Kerry said in a filing yesterday that one of its wholly owned subsidiaries plans to sell the Chai Wan warehouse for HK$2.29 billion and the Sha Tin warehouse for HK$2.33 billion.</p><p>The buyer, CRL, is an indirect wholly owned investment holding subsidiary of the state-owned conglomerate China Resources.</p><p>Chai Wan warehouse is at 50 Ka Yip Street, and had a net book value of HK$2.28 billion at the end of last year, it said.</p><p>With a total gross floor area of 521,253 square feet, the property brought Kerry HK$45 million in net profit last year.</p><p>The Sha Tin warehouse at 36-42 Shan Mei Street New Territories has a total gross floor area of 404,374 sq ft, the filing showed.</p><p>It had a net book value of HK$1.46 billion last year and created an after-tax net profit of HK$113 million in 2021.</p><p>The deal is expected to be completed on or before June 30 and the related transaction costs would be HK$5 million, Kerry Properties said.</p><p>The estimated net proceeds from the disposal in the amount of about HK$4.62 billion will be used as general working capital, and an estimated gain of HK$883 million will be recorded upon completion, it said.</p><p>On the prevailing market conditions under the Covid-19 situation, the financial position of the group and the performance of the warehouses, the directors consider that the disposal presents an excellent opportunity for the company to unlock the value of the warehouses and enables it to recycle capital to strengthen its balance sheets and operations, the filing stated.</p><p>Given that the group has a diverse and robust property portfolio, Kerry Properties felt the disposal would have no material effect on its business and operations, said the filing.</p>

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