KUALA LUMPUR: Parkson Retail Group Ltd has entered into a tenancy renewal agreement for its Shanghai Hongqiao property in China, involving a right-of-use asset valued at about RMB374.5mil.
In a filing to the stock exchange, the retail group said its indirect wholly-owned subsidiary, Shanghai Hongqiao Parkson Development Co Ltd, had signed the agreement with Shanghai Changning Real Estate Management Co Ltd.
The renewed tenancy will run from July 1, 2026, to Dec 31, 2036, for retail space spanning about 49,480 sq m in Shanghai’s Changning district.
Under the agreement, the monthly fixed rent will amount to about RMB5.19mil for the first five years before increasing to RMB5.34mil for the remaining term till 2036.
Parkson said the transaction constitutes a very substantial acquisition under Hong Kong listing rules as the right-of-use asset recognised under IFRS 16 exceeds the relevant percentage ratio threshold.
The company said shareholders’ approval would be sought at an extraordinary general meeting.
Parkson said the Shanghai Hongqiao property remains strategically important to the group, citing its location within a mature commercial hub in Shanghai and its “Urban Outlets” concept integrated with a Korean Wave theme.
“With a fixed-rent structure, clearly defined rent-free and renovation periods and landlord-funded equipment upgrades, the renewal of Shanghai Hongqiao Tenancy is expected to provide better visibility over occupancy costs, facilitate refurbishment and repositioning of the store and enhance its competitiveness and customer experience.
“The board believes that continuing retail business at the Shanghai Hongqiao Property will have a positive impact on the future development of the group,” Parkson said.
