Shimao Property Holdings Ltd. (0813.HK) said it would inject 6.7 billion yuan ($877.6 million) worth of property assets into Shanghai Shimao Co. Ltd. (600823.SS).

Shimao Property, which currently has a land bank of 20.8 million square metres across 17 Chinese cities, said in a statement the deal would allow the firm to better focus on residential and hotel development businesses in China.

Shanghai Shimao would settle the deal by issuing up to 630 million new A shares at 10.68 yuan per share, the company said.

Shanghai Shimao would issue up to another 70 million new A shares at the same price to another shareholder, Shanghai Shimao Enterprises Development Co. Ltd.

The Hong Kong-listed firm said the assets to be injected included commercial and retail properties in Beijing, Shanghai, Jiangsu, Zhejiang, Liaoning and Anhui.

Shimao Property said it would buy 750 million yuan worth of shares in Shanghai Shimao Enterprises, which would become a 51 percent-owned subsidiary of the company.

Shanghai-listed Shanghai Shimao will be become an indirectly owned subsidiary of the Hong Kong firm.

Shares of the Hong Kong-listed firm have surged 23 percent so far this year. The stock closed at HK$17.9 on Wednesday. (US$1=HK$7.8=7.634 yuan)