29 May 2015, Hong Kong – Swire Properties Limited (“Swire Properties”) is pleased to announce that it has formed a joint venture with China Motor Bus Company, Limited (“CMB”) to conditionally acquire a plot of land situated at Chai Wan, Hong Kong, known and registered as Chai Wan Inland Lot No.88 (the “Property”), from CMB at a consideration of HK$850 million. The joint venture is 80% held beneficially by Swire Properties and 20% held beneficially by CMB. An initial deposit of HK$85 million will be payable by the joint venture to CMB after CMB has obtained its shareholders’ approval, with the remaining balance of HK$765 million to be payable on completion of the transaction (which shall not be earlier than 1st July 2017) upon satisfaction of certain conditions, including acceptance by Swire Properties of the land premium payable in connection with the land exchange application as mentioned below.
Planning permission has been granted by the Town Planning Board for the Property, together with certain adjoining land, to be redeveloped into a residential and commercial complex, comprising three residential towers, with shops, a covered public transport terminus and a public open space subject to a number of planning conditions (the “Planning Approval”). Under the existing Government Lease of the Property, the use of the Property is restricted primarily to industrial purposes. Swire Properties will be responsible for co-ordinating the planning and the implementation of the redevelopment, including the submission of a land exchange application to the Government to permit the Property to be redeveloped in accordance with the Planning Approval. If the land exchange application is approved, it is expected that the proposed development will have an aggregate GFA of approximately 692,000 sq. ft.
In the event that the Planning Approval ceases to be valid or the land premium payable in connection with the land exchange is not acceptable to Swire Properties after certain time limits, Swire Properties has the right to exit by requiring CMB to acquire its 80% interest in the joint venture at an exercise price based on the initial deposit and stamp duty paid less the liabilities incurred to the date of exercise of the exit right.