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Hongkong Land has signed an agreement to divest its residential development arm, MCL Land, to a subsidiary of Malaysia's Sunway for SGD 739 million (about USD 578 million). The company plans to use the proceeds to strengthen its balance sheet and raise its ongoing share buyback by USD 150 million, in addition to the USD 200 million programme already underway. The move forms part of Hongkong Land's long-term 2035 strategy to exit the build-to-sell; residential sector and prioritise ultra-premium commercial properties in major Asian cities. Despite this shift, Singapore continues to remain a core focus market.
Hongkong Land has entered into an agreement to sell MCL Land, its residential property development business, to a unit of Malaysia's Sunway for SGD 739 million (around USD 578 million). The company stated that the funds will be directed towards reinforcing its balance sheet and increasing its share buyback programme by an additional USD 150 million, on top of the USD 200 million already announced earlier this year. Advertisement
MCL Land has been active in Singapore and Malaysia with a number of residential projects. Chief Executive Michael Smith explained that the divestment demonstrates the group's intention to recycle capital and gradually exit the residential build-to-sell market. He also said Singapore will remain one of the company's key markets alongside Hong Kong and Shanghai. Smith further pointed out that completing the deal at full net asset value shows that the company's NAV is being recognised by buyers.
The transaction, carried out as a share sale, fits into Hongkong Land's 2035 strategic vision, which is centred on moving away from residential development and focusing instead on ultra-premium commercial real estate across major Asian cities. Chief Investment Officer Michelle Ling noted that apart from the share buyback, the remaining funds will be used to support reinvestment in core markets and to build capacity for growth in the integrated commercial property sector.
Sunway, in its statement, mentioned that the acquisition of MCL Land would strengthen its property development and investment portfolio in Singapore and Malaysia. It added that the assets involved are expected to provide income in the near to medium term, helping improve earnings visibility. Hongkong Land, which is part of the Jardine Matheson Group, emphasised that its commitment to Singapore remains strong despite the withdrawal from residential development.
Source - Reuters
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