SHANGHAI—As part of a program to pare down its debt by selling assets, Shui On Land has agreed to sell Corporate Avenue 1 and 2 here to Hong Kong-based Link REIT. The two office properties, which total about 895,000 square feet, are trading to Link for about 6.6 billion yuan, or US$1.1 billion.

Bloomberg Business reported that Shui On is planning to spin off China Xintiandi, its commercial property subsidiary, in 2016. Chairman Vincent Lo told Bloomberg this past February that Shui On plans to sell almost half its portfolio to reduce debt and fund expansion.

For Link, which operates a mainly retail-oriented portfolio, the acquisition of Corporate Avenue 1 and 2 marks further inroads into mainland China. This past February, the REIT agreed to pay 2.5 billion yuan, or about $402 million, to acquire the EC Mall in Beijing from Nordevo Investments Ltd., its first investment on the mainland.

Developed in the early 2000s adjacent to Shui On's Xintiandi entertainment complex, Corporate Avenue 1 and 2 consist of a 21-story office tower and an adjacent 10-story building. Currently the complex is 98.4% occupied, with substantial lease turnover between now and 2017, according to a regulatory filing.

Shui On sold Corporate Avenue 5 to China Life Insurance Co. in 2013. A partnership of China Vanke, PAG Real Estate Partners and Tishman Speyer is preparing to acquire Corporate Avenue 3 for approximately US$575 million, according to published reports earlier this month. The sale would complete Shui On's selloff of the Corporate Avenue complex.