Joy City sells stake in retail projects
Commercial developer Joy City has agreed to sell a 49 per cent stake in six mixed-use projects in China to an investment fund to be controlled by Singapore’s GIC and mainland insurer China Life for RMB 9.29 billion (US$ 1.3 billion).
In an announcement to the Hong Kong stock exchange, the real estate development subsidiary of the state-owned food conglomerate Cofco said that the fund will acquire shares in three mainland companies controlling the six projects, in Beijing, Shanghai and Tianjin. Joy City will retain a 51 per cent stake in the project companies.
Joy City, which was known as Cofco Land Holdings until January last year, is handling the transaction by first establishing an investment fund to own the three holding companies, then selling shares in the new vehicle to GIC subsidiary Reco Joycore and Glorious Fortune Forever, a unit of China Life Insurance. The deal is scheduled to go before Joy City’s shareholders at a special meeting.
The six properties to be controlled through the new fund include Beijing Chaoyang Joy City, Beijing Cofco Plaza, Beijing Xidan Joy City, Shanghai Joy City, Tianjin Joy City and Beijing Cofco Landmark Tower (formerly Beijing Andingmen Joy City), which is still in the early stages of construction.
In all, the developer has 26 properties in its portfolio, including four hotels and several residential projects. Joy City says it plans to use the proceeds from the disposal to repay debt and for working capital.