TREASURY CHINA Trust (TCT), which is 40 per cent owned by Treasury Holdings, yesterday announced it has secured a $480 million (€369.6 million) refinancing deal of its flagship property “City Center” in Shanghai.
The five-year, multi-currency loan provided by the Industrial and Commercial Bank of China is on terms, TCT says, that are more favourable than an outgoing loan provided by Credit Suisse, which was due for repayment in October 2010.
The loan facility includes 800 million Chinese Renminbi (RMB) to finance 100 per cent of the development cost for the “City Center Extension”, an additional 88,000 square metre retail and office complex, due for commencement later this year.
In recent months, talk of a residential property bubble has lead China’s government to take steps to dampen the market. The measures included an order to the commercial banks to control lending to property developers and the introduction of rules that made it harder for foreigners to invest in Chinese property.
Speaking about TCT’s refinancing deal, chief executive officer Richard David said, “This new loan facility secured during a period of intense tightening of liquidity by the Chinese government demonstrates the confidence that financial institutions have in TCT’s assets and management.”
TCT has also reported that its property portfolio, comprising five developments in Shanghai and one in Beijing has been re-valued at RMB9.42 billion, an increase of 6.64 per cent for the 12 months to June 2010. The real estate projects are located in the financial and political centres of the two cities.
Mr David has said “This is very positive news for us and demonstrates that our strategy of focusing on commercial real estate is reaping benefits.”
TCT commenced trading on the Main Board of Singapore Exchange Securities Trading Limited (SGX-ST) on 21 June 2010.
The company’s portfolio is denominated in Chinese Renminbi (RMB) and the company’s revenues are also earned in RMB. Mr. David said “the Chinese central government’s recent announcement on greater flexibility in the trading of the Chinese currency provides further upside potential.”
Treasury Holdings, the trustee manager of TCT, is the cornerstone of the property portfolio owned by developers Johnny Ronan and Richard Barrett.
The company owns or manages a significant number of investment properties including Spencer Dock, the National Convention Centre and the Treasury Building in Dublin.
A significant portion of Treasury’s property interests are held through the company’s shareholding in two separate companies – Real Estate Opportunities (REO) and Treasury China Trust.
Last month, it was reported that REO, in which Treasury Holdings is the majority shareholder planned to spin off Battersea power station having booked a loss of close to £1 billion (€1.2 billion) for the 14 months to the end of February.
