R&F Properties is to sell its London real estate project Vauxhall Square to Far East Consortium for £95.7 million (800 million yuan), a loss of around 40 percent.
In 2017, Vauxhall Square was obtained for £158 million. The planned construction included residences, offices, and shops, but construction is yet to commence. R&F expects a total loss of about 600 million yuan.
The sale and purchase agreement can also be understood as a short-term mortgage loan. R&F Properties has the right to repurchase all the issued share capital and inter-company loans within 6 months. Exercising the option will require 880 million yuan, plus all costs and expenses incurred. R&F said the repurchase would narrow down losses or even make a profit should the company have enough money to do so by then.
Far East Consortium said the acquisition was consistent with its property development business. It will contribute to the company’s London portfolio and even if the repurchase option is exercised, the transaction will provide an attractive return for the company in the short term.
