Parkson secures 20-year lease renewal in China worth RM148.6mil

By NST in November 6, 2025 – Reading time 2 minute

KUALA LUMPUR: Parkson Holdings Bhd’s 54.97 per cent-owned unit Parkson Retail Group Ltd has renewed its tenancy for a key retail property in Chengdu City, China, in a deal valued at about 251.8 million renminbi (RM148.6 million).

The deal involves Parkson’s indirect unit, Sichuan Shishang Parkson Retail Development Co Ltd, which entered into renewal and supplemental agreements on Nov 6 with several Chinese landlords.

The renewed tenancy covers the basement and five floors of the Times Square Complex at Zongfu Road, Chengdu, along with a specific retail unit on the first floor.

The leases, which currently run until September 2027, will be extended for another 20 years to September 2047, the group said in a Bursa Malaysia filing.

Parkson said the renewal secures a long-term presence for the group in the city’s central business district, where it has operated since 2006.

The extension also helps the group avoid relocation costs and maintain brand visibility in one of its key Chinese markets.

Under the agreements, Parkson will continue paying rent based on a combination of guaranteed and turnover-linked components, with annual payments starting from 34 million renminbi (RM20 million) in the first year and gradually increasing over the 20-year term.

The group said the transaction will be treated as an acquisition of a right-of-use asset under the International Financial Reporting Standard 16, as the leases will be recognised in its financial statements.

According to Parkson Retail Group, the renewal constitutes a major transaction under Hong Kong’s listing rules as the value exceeds 25 per cent of the group’s asset ratio.

However, shareholder approval was secured through a written consent from a closely allied group holding about 55 per cent of Parkson Retail Group’s shares.

Parkson said the transaction will not have a material impact on the group’s earnings or net assets for the financial year ending Dec 31, 2025.

Source link