Sino-Ocean Group, Sino-Ocean Capital acquire 70% of real estate company

Sino-Ocean Group and Sino-Ocean Capital spent 4 billion yuan ($6.16 billion) to acquire 70 percent of Red Star Macalline Real Estate, Sino-Ocean Group said in a statement on Sunday.

This cooperation will help Sino-Ocean Group improve its layout of core business, while the market share of Red Star Macalline Group in real estate also will increase, industry experts said.

According to the agreement, the three parties will effectively hold 35 percent, 35 percent and 30 percent equity of Chongqing Red Star Macalline Corp Ltd to jointly promote the future development and operation of Red Star Macalline Real Estate.

Red Star Macalline Real Estate, established in 2009, is the main real estate platform of Red Star Macalline Group, with sales reaching about 40 billion yuan in 2020. The company's real estate for sale concentrates on eastern, central and western China, accounting for more than 80 percent of its total property.

Sino-Ocean Group, a comprehensive industrial company, has developed more than 500 projects in over 70 cities across the country, with its core business in economically developed regions.

The consistent strategic objectives and compatible main business layout provide a foundation for their cooperation, which is also conducive to promoting the high-quality development of Red Star Macalline Real Estate in the future.

Wang Honghui, CEO of Sino-Ocean Group, said that as the real estate industry moves towards a high-quality development stage, it has become an important trend for real estate enterprises to achieve mutual benefit through strategic cooperation. As the Red Star Macalline Real Estate and Sino-Ocean Group have consistent enterprise culture, such cooperation will boost greater economic growth for both parties.

According to industry experts, Red Star Macalline Real Estate is expected to contribute 30 to 40 billion yuan in sales every year in the next two years, most of which come from its businesses in eastern, central and western China. Therefore, Sino-Ocean Group's land reserve in these regions will be significantly strengthened, and the sales scale is expected to reach a new level. Meanwhile, relying on the strong comprehensive strength, financing ability and operation level of Sino-Ocean Group, the potential of Red Star Macalline Real Estate with high-quality assets is expected to be fully released, creating greater benefits for shareholders.

Wang Hao contributed to this story