Thursday 28 Mar 2024
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KUALA LUMPUR (June 7): Parkson Holdings Bhd's unit in Beijing, China, has signed a new lease agreement for an existing department store there until end-2021, about two and a half years from now until Dec 6, 2021.

In a filing with Bursa Malaysia, Parkson Holdings said this was disclosed on the Hong Kong Stock Exchange (HKEX) by its 54.97%-owned Parkson Retail Group Ltd (PRGL).

PRGL announced to HKEX yesterday that its indirect wholly-owned subsidiary Parkson Retail Development Co Ltd had entered into a new lease agreement to lease a 189-square-metre area at the east side, inside the south gate of Xu Room, located at the Inner Street of Fuxing Men in Beijing, from China National Arts and Crafts Group Co Ltd.

PRGL said rental payable under the new lease agreement amounted to RMB2.5 million (RM1.5 million), and shall be paid on a quarterly basis.

PRGL said Parkson Retail Development is the existing tenant of the property under the previous lease agreement and the group has been carrying out retail business there since 1999.

PRGL also said the operation there has brought stable revenue to the group in the past and the new lease agreement allows the continuity of the group's retail operation at a place which is familiar to the group's customers for long term.

PRGL said its board is of the view that the rentals are reasonable and the terms of the new lease agreement, taken as a whole, are fair and reasonable.

Parkson Holdings, meanwhile, said pursuant to the International Financial Reporting Standard 16 (IFRS 16), entering into the new lease agreement as lessee will require the PRGL to recognise the property as the right-of-use asset in which the amount was approximately RMB2.2 million (RM1.32 million) calculated with reference to the aggregated present value of the fixed lease payments as discounted using a discount rate which is equivalent to PRGL's incremental borrowing rate during the entire term of the new lease agreement.

Parkson Holdings was unchanged at 26 sen at market break today, giving it a market capitalisation of RM277.47 million.

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