Parkson unit to pay penalty for early lease termination

PETALING JAYA: A subsidiary of Hong Kong-listed Parkson Retail Group Ltd (PRGL) will pay a penalty of 11.7 million yuan (about RM7mil) to its Beijing landlord for early lease termination, as it seeks to cease its loss-making retail operations.

PRGL is 54.97%-owned by Parkson Holdings Bhd, which in turn is listed on the Main Market of Bursa Malaysia.

On Aug 7, PRGL said its indirect wholly-owned unit, Parkson Retail Development Co Ltd, signed a lease termination agreement with its landlord, China National Arts and Crafts Group Company Ltd, to terminate early the property lease effective Jan 1, 2026.

The lease covers several spaces in the China National Arts and Crafts Museum.

The tenant has been operating at the properties since 1994.

Following the termination, the tenant will pay a penalty before Oct 10, 2025. If the payment is not made by then, an additional penalty of 0.05% of the total outstanding amount will be imposed everyday until the payment is made.

PRGL will also need to de-recognise the properties as right-of-use assets, for which the amount is approximately 127.1 million yuan (about RM76.3mil).

PRGL said the ceasing of the retail business operations will reduce the financial burden in the long run.