SINGAPORE (Aug 22): First Sponsor says a unit of China Vanke has subscribed for a 55% stake in its subsidiary, FS Dongguan Investment Holdings.

FS Dongguan owns First Sponsor No. 1 (Dongguan) Real Estate Co., a China property development and investment company that is undertaking the development of the Star of East River project.

The project is a mixed-use residential and commercial development comprising offices, a retail mall and residential units with ancillary retail units in Dongguan city, Guangdong province. The site sits on a 528,900sf land plot, and will be developed to have a total gross floor area of 3.96 million sf.

An additional 15% stake in FS Dongguan was subscribed by Regent Land Investment Holdings, which is wholly owned by Shu Zhen, CEO of First Sponsor’s Guangzhou operations.

Upon completion, First Sponsor will hold a 30% stake in FS Dongguan, making the latter an associated company.

The group is estimated to recognise a net gain of S$95.3 million from the transaction and net proceeds of about S$243.4 million.

First Sponsor says the transaction will allow it to share its development risks with Regent and China Vanke as joint venture partners, while leveraging on China Vanke's branding and experience to promote and manage the project.

Shares of First Sponsor are trading 0.4% lower at S$1.26.