Far East Consortium Sells Yau Ma Tei Student Dormitory to JD.com for HKD 750M

Far East Consortium (00035) announced the sale of its Yau Ma Tei student dormitory to JD Fabulous, a subsidiary of JD.com (09618), for HKD 750 million. The property, formerly the Silka Seaview Hotel, has been converting its rooms into student dormitory units, with full conversion expected to complete in the second half of this year. The transaction enables Far East Consortium to realize asset appreciation and establish a strategic relationship with JD.com for potential future collaboration on student accommodation projects in Hong Kong.

Far East Consortium Records HKD 423 Million Gain from Property Sale

Far East Consortium estimates the group will record a gain of approximately HKD 423 million from the transaction upon completion. After repaying bank loans of approximately HKD 630 million, the remaining proceeds of approximately HKD 106 million will be used for the group's general working capital.

Far East Consortium Retains 3-Year Management Contract Post-Sale

Under a management agreement to be executed upon completion, the manager (an indirect wholly-owned subsidiary of Far East Consortium) will continue to manage and operate the property as a student dormitory for a term of 3 years. The manager will pay guaranteed income to Jiecai Limited annually during the 3-year term.

Far East Consortium Pursues Strategic Partnership with JD.com

Far East Consortium stated the transaction will unlock significant asset appreciation value from its portfolio, allowing the group to recognize disposal gains. The net proceeds will enable the group to repay existing bank loans with the balance used for working capital. The transaction provides the group with an opportunity to establish a strategic relationship with JD.com Group and explore further cooperation opportunities, including potential student dormitory projects in Hong Kong.

FAQ

What did Far East Consortium sell to JD.com?

Far East Consortium sold its Yau Ma Tei student dormitory property, formerly the Silka Seaview Hotel, to JD Fabulous (a JD.com subsidiary) for HKD 750 million. The property has been converting rooms into student dormitory units with full conversion expected in the second half of this year.

How will Far East Consortium use the proceeds from the property sale?

Far East Consortium will use approximately HKD 630 million to repay bank loans and allocate the remaining approximately HKD 106 million to general working capital. The group expects to record a gain of approximately HKD 423 million from the transaction.