STAR GROUP ASIA (01560) announced that, after the trading session of the Stock Exchange on January 22, 2026, the seller (an indirect wholly-owned subsidiary of the Company) and the buyer entered into two provisional sale and purchase agreements. Under these agreements, Seller 1 Wise City Holdings Limited and Seller 2 Di Ying Limited agreed to sell, and the buyer New Well International Limited agreed to purchase the properties for a total consideration of HK$58 million.

According to the terms of the agreements, the buyer agreed that upon completion, the properties will be leased to a designated tenant (a wholly-owned subsidiary of the Company) at a monthly rental of HK$250,000 (excluding government rent, rates, and management and air-conditioning charges, all of which will be borne by the designated tenant). The initial lease term is two years commencing from the completion date, requiring a deposit equivalent to two months' rent and one month's rent paid in advance.

The properties include Property 1: Residential units on floors 1 to 4 at No. 16 Yiu Wa Street and floors 1 to 5 at No. 18 Yiu Wa Street, Hong Kong; and Property 2: The residential unit on the 5th floor at No. 16 Yiu Wa Street, Hong Kong.

The Board has been continuously assessing the Hong Kong commercial environment, developments in the residential property market, and the Company's financial position. The Directors believe that the disposal will benefit the Group by improving its debt profile, liquidity, financing costs, and overall financial condition through the realization of its investment in the properties.

The sale and leaseback arrangement will enable the Group to continue operating its apartment rental business from these properties without expending the effort and cost required to find alternative residential premises for the business or to restore the properties to vacant possession status upon the expiry of the sale and leaseback agreement.

Furthermore, the monthly rent under the sale and leaseback arrangement is broadly comparable to the monthly interest payments currently borne by the Group. The average bank annual interest rate is approximately HIBOR plus 2.5% (currently about 5% per annum).

Following the disposal, the net proceeds will be used to repay the outstanding loan balance, which will reduce the related monthly financial burden, thereby improving cash flow, maintaining the operational use of the properties, and enhancing financial flexibility.