Tianjin Difu Sold For RMB 339 Mln

Foreign investors are quietly investing in the domestic property market, regardless of recent rumors on policy adjustments.

Deluxe Family Co., Ltd. announced today that its shareholders have agreed to transfer a 100% stake in Tianjin Difu Department Store Management Co., Ltd., currently held by Tianjin Huadi Investment Management Co., Ltd., a wholly-owned subsidiary of Deluxe Family, to COF III SRL, a unit of ING Real Estate Investment Management NV, for RMB 339.072 mln.

Tianjin Difu Department Store Management is an owner as well as a developer of commercial properties with a total area of 20,661.36 sq. meters, located at Changchunteng Yuntong Mansion, 818 West Nanjing Road, Shanghai. It owns 54 parking lots in the area as well.

The deal has gotten the nod from the Administrative Commission of the Tianjin Economic and Technological Development Area. A large part of the RMB 200 mln net gain resulting from the deal will appear the company's 3Q results. Deluxe Family therefore predicts a 50% to 100% increase in net profit for the first three quarters compared to the same period in 2007, when net profit was RMB 113.34 mln.

As of the transfer date, Tianjin Difu Department Store Management's total assets were approximately RMB 617 mln, liabilities were RMB 597 mln, indicating a mere RMB 20 mln in net assets.

The plan was disclosed on 16 Jun 2008 when Deluxe Family said it was to sell the above-mentioned assets as a result of lower-than-expected profits, ascending interest rates and a credit squeeze. Despite the deal, Deluxe Family's stock price slipped 0.99% to RMB 7.95 yesterday.


Source: China Business News

Date: 14 Aug 2008

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