SH IND URBAN (00563.HK): Subsidiary leases 12 floors of property in Changning, Shanghai for branded apartments; connected and discloseable transaction
NewTimeSpace News: On 27 August 2026, Shanghai Industrial Urban Development Group Limited (stock code: 00563) announced that its indirectly wholly-owned subsidiary has entered into a lease agreement with the landlord to lease 12 floors (the 3rd to 14th floors) of the building at No. 89 Jiangsu North Road, Changning District, Shanghai, for the operation of residential apartments under the Group's brand, for a term of up to 15 years from the date of approval of the lease by independent shareholders at the extraordinary general meeting, renewable every three years.
According to the announcement, the property has a total gross floor area of approximately 10,359.40 square meters and can be used for commercial, office or residential purposes, with the tenant also entitled to free use of 12 underground parking spaces in the building. The annual rent is RMB 7,339,800 for the first to fifth lease years, RMB 7,559,994 for the sixth to tenth lease years, and RMB 7,786,794 for the eleventh to fifteenth lease years, representing a 3% increase every five years over the lease term; rent is payable monthly in advance, together with a rental deposit of RMB 611,650, equivalent to one month's rent in the first five lease years. A property management fee of RMB 19.88 per square meter per month is payable to an independent third-party property management company.
Under HKFRS 16, the Company will recognize a right-of-use asset in respect of the lease, with an expected unaudited value of approximately RMB 90,110,911, being the present value of lease payments over the 15-year term discounted at the weighted average incremental borrowing rate. In terms of the Listing Rules, as one or more applicable percentage ratios exceed 5%, the lease constitutes a connected transaction subject to reporting, announcement and independent shareholders' approval requirements; as the ratios exceed 5% but are all below 25%, it also constitutes a discloseable transaction subject to reporting and announcement requirements.
The subsidiary intends to operate the property as a mid-end white-collar apartment project under the Group's brand, expected to provide approximately 240 residential units with an average unit area of about 40.5 square meters, targeting young white-collar tenants working in the surrounding Zhongshan Park business area. Located at the junction of three major business districts (Zhongshan Park, Caojiadu and Global Harbor), the property is about 700 meters on foot from Longde Road Station on Metro Lines 11 and 13, with access to a total of six metro lines including Lines 2, 3, 4 and 14. The Company has established an independent board committee and appointed an independent financial adviser; a circular containing details of the lease is expected to be despatched on or before 17 September 2026, and the lease remains subject to approval by independent shareholders at the extraordinary general meeting.
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