Li Ka-shing's CK Asset makes US$492 million profit from timely sale of Chengdu development as it pulls back from China

By Cheryl Arcibalcheryl.arcibal@scmp.com / https://www.scmp.com/business/companies/article/3094609/li-ka-shings-ck-asset-makes-us492-million-sale-chengdu?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp&utm_content=3094609 | July 29, 2020 5:01 PM SGT
Li Ka-shing's CK Asset Holdings has sold a mixed residential and commercial project in Chengdu for US$1.02 billion, the latest mainland China asset disposal of the group.
The company said in an exchange filing late on Thursday that Chengdu Le Parc in the capital of southwestern Sichuan province was sold to Hong Kong-listed Yuzhou Group and Chengdu Ruizhou, giving it an estimated gain of HK$3.81 billion (US$492 million). The Chengdu project has 23,253 residential and commercial units, of which 16,503 units or 70.1 per cent have been sold.
"Li Ka-shing, the senior consultant of CK Asset, and chairman Victor Li Tzar-kuoi have full confidence in Hong Kong and the mainland," the company said in a separate statement. "With the disposal, CK Asset still has more than 50 real estate projects in more than 20 cities."
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The sale of the Chengdu project is the company's latest asset disposal in mainland China and comes at a time when tensions between the US and China have been escalating. In October, CK Asset sold a 1.53 million square feet development in the Xigang district of Dalian for 4 billion yuan (US$571 million). The company acquired the right to develop the land for 1.9 billion yuan in 2011.
The US consulate in Chengdu, southwestern China, which has been ordered to close by Beijing. Photo: SCMP alt=The US consulate in Chengdu, southwestern China, which has been ordered to close by Beijing. Photo: SCMP
In the past, the decision of the group to sell assets in China was criticised by mainland media as an indication of Li's view of the country's economy just when Beijing was facing a slowing growth. The latest sale comes in the wake of a Washington initiative to take punitive actions toward Chinese officials deemed to have eroded Hong Kong's freedoms.
On Wednesday, the US ordered China's consulate in Houston, Texas to shut down on suspicions that the diplomatic post was linked to espionage and intellectual property theft. Today, Beijing retaliated by ordering the US consulate in Chengdu to cease its operations.
In Hong Kong, CK Asset may be looking to bulk up its land holdings by forging closer ties with troubled developer Goldin Financial Holdings. Li's conglomerate has offered financial and restructuring advice to Goldin to help alleviate its multibillion-dollar debt burden.
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CK Asset only owns 4 million sq ft of land bank in Hong Kong, the least among the city's major developers. Sun Hung Kai Properties has 58.9 million sq ft while Henderson Land Development owns 14.6 million sq ft, according to their annual reports.
Goldin's key assets include its headquarters at 17 Kai Cheung Road on Kowloon Bay, a 27-storey office tower last assessed at more than HK$15 billion. On Friday, Goldin said it was selling the residential site on the runway of the city's former Kai Tak airport to Sino Shield, a private company incorporated in the British Virgin Islands.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.
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