Mainboard-listed HLN Technologies, the manufacturer of precision metallic, elastomeric and polymeric components, says it is acquiring a 15.16% stake in Tianjin Swan Lake Real Estate Development Co. for RMB64 million ($12.7 million) to gain a foothold in China’s property market.

The consideration for the proposed acquisition is to be satisfied by cash of RMB58.5 million and the issue of 2.2 million HLN treasury shares priced at $0.50 each, which is at a premium of 14.3% to the group’s volume weighted average share price of $0.4375 on Jan 19.

HLN Technologies says the acquisition values Tianjin Swan Lake’s commercial property project in Wuqing district – Jing Jin Business Centre (JJBC) – at RMB420 million which is a significant discount to the valuation of RMB645 million conducted independently by DTZ Land and Real Estate Valuation (Shenzhen) Co. Tianjin Subsidiary Company, an international property consultancy.

JJBC is a Grade 5A twin-tower office building with a gross floor area (GFA) of 74,488 square metres. JJBC will consist of two office blocks – a 12-storey South Tower and a 16-storey North Tower, as well as 367 parking lots. This project is 100%-owned by Tianjin Swan Lake and is fully financed by the developer’s internal resources without external loans.

Located only 25 kilometres (km) from Tianjin city centre and 70 km from Beijing, the Wuqing district has significant development potential due to its strategic position and established transport infrastructure links to the cities of Beijing and Tianjin.

HLN has negotiated with the vendor to provide a guarantee that the net operating profit after tax margin of Tianjin Swan Lake will be at least 30% for the financial years ending 31 December 2011 and 31 December 2012 respectively.