Shui On Land Limited (HKEX:272) has entered into a Cooperation Agreement with its subsidiaries, Manulife LP, China Life Trustees Limited (CLT), and Dajia Insurance Group entities to form a joint venture. The initiative involves transferring 99% equity interests in Shanghai Xingqiao Real Estate Co., Ltd. (the “Project Company”) to the joint venture. This move allows the company to switch its offshore investment in Shanghai-based office buildings, shopping malls, and related facilities to an onshore structure, potentially unlocking more favorable terms through onshore bank financing and reducing foreign exchange exposure.

According to the agreement, the joint venture will have a total capital contribution of RMB3.3002 billion. Shui On Land’s indirect subsidiaries commit approximately RMB1.3366 billion for a 40.5% interest in the partnership, while Manulife LP, CLT, and Dajia entities collectively hold the remaining interests. Following completion, the new entity will retain 99% of the Project Company, with Shui On Land maintaining a 40.5% stake in the joint venture.

Company disclosures indicate no material profit or loss impact from these transactions, as neither the Project Company nor the new joint venture will be consolidated into Shui On Land’s financial statements. The unaudited net assets of the Project Company stood at RMB5.505 billion as of 30 September 2025, with income primarily generated from its properties in Huangpu District, Shanghai.

The transaction is classified as a connected transaction under Chapter 14A of the Hong Kong Listing Rules, as CLT is associated with a substantial shareholder of a Shui On Land subsidiary. The applicable percentage ratios for Shui On Land’s capital commitment exceed 1% but remain below 5%. Consequently, the deal is subject to reporting and announcement requirements but is exempt from shareholders’ approval. The board of directors, including independent non-executive directors, has approved the agreements on grounds that they are negotiated at arm’s length, fair, and beneficial to overall shareholder interests.

The parties note that completion of the transaction remains subject to the satisfaction of certain conditions, and there is no assurance that all requirements will be fulfilled. Investors are advised to exercise caution when dealing in the company’s securities.