According to Zhitong Finance App, Songdu Service (09608) issued an announcement. On January 5, 2024, Songdu Property (an indirect wholly-owned subsidiary of the company) signed a housing transfer contract with Guzhang Daying. Guzhang Daying agreed to transfer the property's land use rights to Songdu Property at a total cost of RMB 39.73 million, subject to approval by independent shareholders at the special shareholders' meeting.
According to reports, the property is located 50 meters southeast of the intersection of Wangyang Street and Jiumu Road in Shangcheng District, Hangzhou, with 102 and 104 rooms and units 1 to 6 of the Sunshine Jingtai Apartment Building 1.
The Group is a well-known comprehensive property management service provider in Zhejiang Province, mainly engaged in providing property management services, value-added services for non-owners, community value-added services and other businesses. Since the property was already managed by the Group prior to the acquisition, and the Group has experience in managing long-term rental apartments, the Group believes that the proposed acquisition will have a good synergy effect with the Group's existing business and enable the Group to utilize its expertise and experience in the property sector and generate potential rental income.
The Group explores investment opportunities from time to time to enhance the overall interests of the company and shareholders. Considering that the property is in an advantageous location and surrounding area with high-quality supporting facilities, and that the price of the property is relatively low in the current macroeconomic environment, the Group believes that the property is expected to bring capital appreciation in the future, and that the proposed acquisition will provide the Group with a good opportunity to profit from idle capital (due to the continuous decline in interest rates on bank deposits in China since the second half of 2023, the income generated by bank deposits has continued to decrease). After completion, it is expected that the property will be used for various purposes such as the Group's office space and used by the Group to cope with the rapid development of its future business and future business expansion. If the group does not fully use the property, it can also rent out the property to generate external rental income.
The directors believe that it is in the Group's interest to acquire the property to save future rent expenses and effectively reduce leasing costs. The acquisition will optimize the Group's asset structure and enhance the Group's ability to withstand external financial risks, facilitate the long-term development of the company, and meet the overall interests of the company and shareholders. Furthermore, since the acquisition under the housing transfer contract does not involve a property agency, the Group is not required to incur any additional commission expenses.