Ching Lee Holdings Limited (3728.HK) invests HK$24 million to develop To Kwa Wan real estate project

HONG KONG, June 6, 2022 – (ACN Newswire) – – Ching Lee Holdings Limitedstock code 3728.HK (“Ching Lee” or “The Group”) entered into a definitive joint venture(1) agreement with five partners(2) in early April and agreed to establish a project company(3), with a contribution proportional to HK$24 million to be shared in the form of 20% equity, jointly invest approximately HK$112 million to acquire the land in To Kwa Wanand plan to expand into commercial and residential properties.

After participating in the AVA228 residential project in 2018, Ching Lee successfully transitioned from a builder to a full industry chain real estate developer. The project acquired this time is located at 105 and 105A Pak Tai StreetTo Kwa Wan, covering an area of ​​approximately 2,132 square feet. There are plans to turn it into a 19-storey boutique-style commercial and residential complex. The ground floor and the first floor are intended for commercial areas, and the remaining floors are residential. The floor area of ​​the unit will comply with the Hong Kong government’s new policy on “minimum apartment size” (4) for residential buildings introduced earlier this year. The acquired project is a combined site, located in the heart of To Kwa Wan which is a mature and well equipped area with adequate ancillary facilities. In addition to this, the project will produce a significant synergistic effect with the Urban Renewal Authority (URA) and has great development potential. In recent years, at Kwa Wan has undergone tremendous changes. Buoyed by the government’s launch of the URA’s “Four Projects” (5) which attracted major developers to expand into the area and redevelop old buildings while becoming the new gathering place for young people with a new looks. Besides the opening of the Kowloon-Canton Railway the Shatin at the central link, at Kwa Wan turns into a comfortable and convenient living environment, and also becomes more popular with younger generations.

Mr. Ng Choi WahPresident of Ching Lee Holdings Limited said: “We are experienced and knowledgeable in the construction sector and are very enthusiastic about discovering new real estate development projects. It is a big step for the Group to go from being a builder to a real estate developer The Group remains optimistic about the hong kong housing market and will continue to actively seek other potential real estate development opportunities.”

The Group has been offering construction, consulting engineering and project management services for more than 23 years. With many years of rich experience in the construction industry, we now provide integrated services for real estate, foundation works, construction engineering to sale. We believe that integrating resources can enhance synergies, reduce intermediate business costs and improve project profitability. Successful examples include the residential project “AVA228” on Tai Po Road in Sham Shui Powhich was one of the first urban redevelopment projects in Sham Shui Po. The “AVA228” project was completed at the end of 2021 and all residential units were sold, laying the foundations for the Group’s real estate development milestones.

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Notes to editors:

1. Definitive JV agreements

On April 7, 2022, Ching Lee Holdings Limitedthe partners and an additional investor, Berrystead Investment, entered into the definitive JV agreements regarding the project company. To the knowledge of Ching Lee, the Partners have relevant experience and resources to ensure the financing of real estate projects held by the Target companywhich will be used to acquire a site project located at 105 and 105A Pak Tai Street in Kwa Wan from the Chinese-funded developer Wuyi Group and rebuild it into a 19-story commercial and residential complex. The maximum capital commitment of the project company is HK$150 million. On the same day, the project company (as buyer) entered into a sale and purchase agreement (S&P) with an independent third party Limited Chinese expert development (as seller) regarding the purchase of all of the issued share capital of the target company, as well as the shareholder loan advanced by Limited Chinese expert development to Target companyfor full consideration of HK$111.5 million. The conclusion of this S&P agreement should take place no later than 30 days from the date of the S&P agreement.

https://www.chingleeholdings.com/upload/docs/report_202204072045270.pdf

2. Five partners

Ching Lee Holdings Limited (“Ching Lee”) confirmed the establishment of the “Project company” with Primo Holdings Limited, Zun Wang HoldingsRJHK, Gainful Asset Management and Berrystead Investment (partner), holding 20%, 20%, 25%, 20%, 5% and 10% interest respectively.

Ching Lee Holdings Limiteda limited liability company incorporated under the laws of Cayman Islandsis an entrepreneur in hong kong with over 23 years of experience in the public and private sectors. The main activities of Ching Lee Holdings and its subsidiaries are the provision of construction works and consultancy and project management services in hong kongengaged in the provision of substructure construction work services, superstructure construction work services and repair, maintenance, alteration and addition (RMAA) work services. Ching Lee Holdings Limited was transferred from the GEM card to the main card of HKEx on September 18, 2017 with stock code 3728.hk. Company website: http://www.chingleeholdings.com

First Limited participationsa limited liability company incorporated under the laws of hong kong and a direct wholly owned subsidiary of Sunwah Kingsway Capital Holdings Limited, a limited liability company incorporated in Bermuda and whose shares are listed on the main table of the Sotck exchange (Stock code: 00188). It is mainly engaged in investment holding.

Zun Wang Holdings is a limited liability company incorporated under the laws of BVI. It is mainly engaged in investment holding. Zun Wang Holdings is ultimately 100% owned by Mr. Chen Jiahui.

RJHK is a limited liability company incorporated under the laws of BVI. It is mainly engaged in investment holding. RJHK is ultimately 100% owned by Mr. Jian Weiwen.

Gainful Asset Management is a limited liability company incorporated under the laws of the BVI. It is mainly engaged in investment holding. Gainful Asset Management is ultimately 100% owned by Mr. Chen Weison.

Berrystead Investment is a limited liability company incorporated under the laws of hong kong. It is mainly engaged in investment holding. Berrystead Investment is ultimately 100% owned by Mr. Lee Wai Sang and Mrs. Jackie Leung Mo Shan.

Conclusion of the framework cooperation agreement on December 9, 2021

With regard to the conclusion of the framework cooperation agreement on December 9, 2021 by Ching Lee with the Partners with respect to the proposed establishment of a joint venture, the “Project company“, and the acquisition by the “Project company“of one hong kong incorporated holding company, the “Target company“. Under the Framework Cooperation Agreement, Ching Lee and the partners have agreed to, among other things, negotiate and enter into definitive agreements regarding the formation of the “Project company“.

3. The “Project company

The project company, Empire Elite Group Limiteda limited liability company incorporated under the laws of the BVI on November 12, 2021. It is mainly engaged in investment holding.

There “Target company

The target company, Front Builder Investment Limiteda limited liability company incorporated under the laws of hong kong on September 28, 1988. The main activity of the Target company is the rental of real estate for rental income hong kong.

4. The government’s new policy on “minimum apartment size” requirement

The government announced the February 24, 2022 that the minimum apartment size requirement will be extended to all government land sales, rail property development projects, URA projects, as well as lease modification and land exchange applications by private promoters. The requirement that each apartment must reach at least 26 m² (approximately 280 square feet) in salable area aims to improve the living space and meet the desire of society.

https://www.info.gov.hk/gia/general/202202/24/P2022022400629.htm?fontSize=1

5. Urban Renewal Authority “Four Projects”

Four projects include Kai Ming Street Project, Hung Fook Street / Kai Ming Street ProjectKai Ming Street / Wing Kwong Street Project and Wing Kwong Street Project.

https://www.ura.org.hk/en/news-centre/press-releases/20211122

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