This undated photo shows the building of Swire Pacific Ltd (second right) in Central, Hong Kong. (EDMOND TANG / CHINA DAILY)

HONG KONG - Swire Properties Ltd has agreed to sell an office tower in eastern Hong Kong Island to a consortium comprising a fund managed by real estate private equity firm Gaw Capital Partners and other partners for HK$9.85 billion (US$1.27 billion).

We remain committed to Hong Kong and to our long-term investment strategy in our home market. We’re confident in the Hong Kong office market’s long-term outlook.

An official with Swire Properties

Hong Kong-listed property arm of Swire Pacific Ltd has agreed to sell the entire office building, Cityplaza One, to Rocha Land Ltd, in a move to realize cash from its investment for use in general working capital, Swire Properties said in a filing to the Hong Kong bourse late on Monday.

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The property group said the deal is part of its ongoing business strategy of disposing certain non-core assets to enable the company to recycle capital and channel it to new projects.

“We remain committed to Hong Kong and to our long-term investment strategy in our home market,” an official with Swire Properties said in a statement. “We’re confident in the Hong Kong office market’s long-term outlook.”

Swire Properties said the deal will be settled partly by cash and by the issue of shares representing 37 percent of the holding company of Rocha Land, which in turn will represent an indirect equity interest of 37 percent in the Cityplaza One property.

Swire Properties is expected to record a gain on disposal of about HK$2.01 billion on a statutory basis, while Swire Pacific is expected to record an attributable gain on disposal of about HK$1.65 billion on a statutory basis, it added.

Separately, Swire Pacific’s flagship carrier Cathay Pacific Airways Ltd is undergoing a restructuring, recently announcing that it will slash 5,900 jobs and end its regional carrier as it grapples with a plunge in demand due to the coronavirus pandemic.

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