The 147,025 sq ft of One Exchange Square includes the top nine floors which is currently its permanent headquarters in Hong Kong, and a retail space on levels one and two. The retail space will be enhanced into an immersive lobby for HKEX.
Under two sale and purchase agreement terms, two of HKL's wholly-owned subsidiary and HKEX have agreed to purchase the strata title acquisition in phases.
The total cash proceeds of HK$6.3 billion will be received over time as individual floors are handed over to HKEX. Approximately 45% of gross sale proceeds are expected to be received in 2025, and the balance of 55% in 2026.
HKL says that it will contribute up to HK$400 million towards planned enhancements to the property, with the costs expected to be incurred over the next few years.
The property represents 3.2% of the total value of HKL's central portfolio. HKL intends to use up to 6.3% of the gross sale proceeds to provide enhancements to the property and use the remaining proceeds in two ways - 80% for the reduction of net debt, and 20% for a share buyback.
The company says that a share buyback programme is in line with its recently announced corporate strategy in which it intends to return capital to shareholders by way of a share buyback programme of up to US$200 million, which will be financed using proceeds from this transactions and other capital recycling programmes carried out during the FY2024 ended Dec 31, 2024.
Shares in Hongkong Land closed 1 US cent lower or 0.236% down at US$4.22 on Apr 24.
