Zitong Financial App NewsSafariSpinSafariAeon (00984) issued an announcementSafariSpinSafariOn 9 May 2024, the company (as the lessee) received an offer for renewal of the tenancies of the properties formally accepted by the agent (as the agent of the landlord) for a fixed term of four (4) years, from 1 June 2024 to 31 May 2028 (both dates inclusive), and has the option to renew a further term of three (3) years. The Company has leased these properties since 1987 for the purpose of carrying on its retail business in these properties.
In accordance with HKFRS 16, the Company (as lessee) entered into a renewal offer to require the Group to recognize the right-to-use assets arising from the extension of the lease term. Therefore, under the listing rules, the renewal offer will be regarded as the acquisition of assets by the group. The value of the right-to-use assets to be recognized by the group under the renewal offer is about HK $5SafariSpinSafari.87 billion yuan.
It is learnt that these properties are located in all parts of the ground, first, second, third and fourth floors of Hong Yee Plaza, 2 Hong Shan Road, Hong Kong. it includes the air-conditioning unit room, the lift room on the fifth floor, the ventilation room and capacitor room on the sixth floor and the ventilation room on the seventh floor.
The Group's main business is to carry on retail business under the commercial names of "AEONSTYLE", "AEON" and "AEONSUPERMARKET" through chain stores in Hong Kong and China. Due to the nature of its retail business, the Group is required to lease retail outlets from time to time to carry on its retail business. All retail stores, such as the large ones in these properties, contribute to and maintain the scale of the Group's operations, thereby helping the Group to reduce overall operating costs, strengthen the bargaining power of the Group and its business partners, and expand its store network and market share.
The company has been leasing these properties to landlords since 1987 to carry on its retail business in these properties. As the existing tenancy agreement will expire on 31 May 2024, the Company and the agent (as the agent of the landlord) have conditionally entered into a renewal offer to renew the leases of the properties until 31 May 2028, and the Company has the option to renew for a further period of three years.