KUALA LUMPUR, Oct 31 — Parkson Holdings Bhd’s indirect unit in China, Jiangxi Parkson Shopping Centre Management Co Ltd, has entered into a 20-year tenancy agreement with Nanchang Hui Xin Industrial Co Ltd for a contract value of 70.49 million yuan (about RM45.82 million).
Jiangxi Parkson is an indirect wholly-owned subsidiary of Parkson Retail Group Ltd (PRGL), a 54.97 percent-owned subsidiary of Parkson Holdings.
PRGL, in an announcement on the Hong Kong Exchange, said the tenancy agreement will commence when the shopping centre is opened, tentatively on Oct 1, 2023.
According to Parkson Holdings’ filing with Bursa Malaysia, Jiangxi Parkson will occupy 28,585.47 square metres of the Royal Core Plaza, located in Nanchang City.
It said pursuant to the International Financial Reporting Standard 16 – Leases (IFRS 16) issued by the International Accounting Standards Board, entering into the tenancy agreement will require the PRGL Group to recognise the property as a right-of-use asset, the amount of which is approximately 70.49 million yuan.
The amount is calculated with reference to the present value of the rental payments as discounted using a discount rate equivalent to PRGL’s incremental borrowing rate during the entire term.
Thus, entering into the tenancy agreement and the transactions contemplated thereunder are regarded as asset acquisition by PRGL.
Parkson Holdings said the asset acquisition does not have a material impact on the group’s earnings for the financial year ending Dec 31, 2022.
