Swire Properties is offloading one of its properties in Hong Kong as part of its strategy to recycle capital and build new projects.

The company, one of the largest mall and office building owners in Hong Kong, said it had reached a deal for the sale of its 21-story office building to a consortium of buyers led by Gaw Capital Partners.

In a filing with the Hong Kong Stock Exchange, Swire Properties said that it has reached an agreement for the sale of its Cityplaza One building for HK$9.85 billion ($1.27 billion). The building at the Taikoo Shing project in the southern part of the island is owned by Swire Pacific, the company's listed property unit and parent.

The amount the investors are paying translates to HK$15,609 per square foot. This represents an 18% discount over the price the company sold its neighboring properties for more than two years ago - namely Cityplaza Three and Citiplaza Four office towers.

Gaw Capital confirmed the deal, saying that it had agreed to purchase the 23-year-old office building. The company added that it will be using funds under its management to finance the transactions. One of the companies that joined the consortium is UK-based multinational asset manager Schroder Pamfleet.

Despite selling the property at a discount, Swire Properties said the divestment was necessary for it to "realize cash from its investments." The company added that the building was part of its noncore assets and that its liquidation should allow it to focus more on building new projects for its core markets. Swire Properties said that it was still committed to Hong Kong and that it was still pursuing its long-term strategy within the city.

"[It] is part of our ongoing business strategy - to dispose of certain noncore assets that will enable us to recycle capital and channel it to new projects in our core markets," a Swire Properties representative said in a separate statement.

The company's finances were severely affected by the disruptions caused by the coronavirus pandemic. Its interim core profit dropped by more than 80%, while its parent group, Swire Pacific, reported its first interim loss since 1974.

The company attributed the interim loss to the slump in the business of its Cathay Pacific Airways unit owing to the international travel demand slump.