China Central Properties, the AIM-listed property company that invests in Chinese development projects, has paid £101m for a 1.4m office development in Guangzhou, southern China.
The company undertook the purchase by buying the company that owned the development, Guangzhou Heyin Plaza Development Company. It will pay £54m with cash from its own balance sheet and the rest in bank debt.
The Guangzhou Heyin Plaza development is a 51-storey office with a 5-level retail podium, which is scheduled for completion in 2010.
Speculation and overheating
China Central listed on AIM in June 2007, and raised £270m through a combination of shares and convertible bonds. It has seen shares fall 40% to 60p since listing, in line with the broader AIM-listed property sector.
In preliminary results for the period to 31 December China Central revealed yesterday that its net asset value stood at $2.02.
'Speculation, overheating of the economy and increasing inflationary pressure have prompted the Chinese Central Government to introduce progressive austerity measures. The consolidation of smaller players will create an increase in supply of partially-completed property projects, feeding directly into CCP's business,' chairman Vincent Lo said.