US$65 million divestment driven by strong demand for modern logistics facilities in China

Macau Property Opportunities Fund Limited, managed by Sniper Capital Limited, is pleased to announce the sale of its two properties in the Chinese city of Zhuhai - APAC Logistics Centre and Cove Residence - for a combined total of RMB392 million (US$65 million). 

The Fund jointly acquired the sites for US$11 million in 2008. Since then, it has developed APAC Logistics Centre into a state-of-the-art logistics facility and Cove Residence into a 484-unit apartment complex. 

The agreed sale price represents a 34% premium to the September 2013 valuation of the properties and generated a net profit of US$29 million - equivalent to an internal rate of return of 21%. 

MPO Chairman David Hinde said: "Our investment in APAC Logistics Centre and Cove Residence was driven by the belief that demand for well-located properties in the area would escalate as Macau and neighbouring Hengqin Island continued to grow rapidly. This divestment has allowed us to generate a significant return on investment for our shareholders." 

Market backdrop 

The sale of MPO's Zhuhai properties comes against a backdrop of rising domestic consumption in China, fuelled by an online retail spending boom that has made the country Asia's biggest online retail market. Amid burgeoning growth in China's e-commerce industry, demand for industrial property has increased, yet modern logistics facilities in China remain undersupplied . As demand for logistics property continues to outstrip supply, rents in the sector have risen at a rate of 5-10% annually in recent years, pulling ahead of rental growth of less than 5% in the retail and office sectors. 

Given these market dynamics, APAC Logistics Centre is well positioned to satisfy the growing demand for logistics space. With more than 1.3 million square feet of logistics facilities, it will be one of the largest multifunctional warehouses in the western Pearl River Delta upon its final completion. 

The neighbouring Cove Residence, with 484 studio, one- and two-bedroom units, will provide 215,000 square feet of living space and is tailored to meet rising demand for leased employee accommodation in the region. 

Most construction work on both projects has been completed and occupancy permits have been obtained. 

- Ends - 

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