CHINA BOTON (ASX: 03318) has announced a significant property acquisition in Shanghai.

The company's board has entered into an agreement for the purchase of a property located in the Fengxian District of Shanghai.

According to the announcement, the buyer, an indirect wholly-owned subsidiary of the company, will acquire 100% of the registered capital of the target company, Shanghai Longyin Biotechnology Co., Ltd., for a total consideration of 240 million yuan.

The target company functions as an investment holding entity, and its sole asset is the property in question.

The property is situated at No. 88 Chenghebang Road in Shanghai's Fengxian District and includes land with a total gross floor area of 15,864.9 square meters and buildings with a total developable floor area of 61,039.08 square meters.

The building is designated for industrial use, with a majority of its floor space currently leased out to generate rental income, with the leased area amounting to 56,910.89 square meters.

The acquiring subsidiary is one of the existing tenants of the property.

Fengxian District is recognized as a significant industrial cluster and manufacturing hub in the southern part of Shanghai.

The construction of the property was completed and it became operational in 2024, and it is considered relatively newer and of higher quality compared to neighboring buildings.

The board has stated its ongoing commitment to seeking and evaluating investment opportunities with the aim of maximizing returns for shareholders.

Given that the property held by the target company is in a strategic location within a key industrial cluster and manufacturing hub in southern Shanghai, the board believes the target company's value holds considerable growth potential, supported by a stable source of rental income.

The buyer currently conducts research and development operations at the property under a lease agreement.

Upon completion of the acquisition, the target company will become a wholly-owned subsidiary of the group, which will eliminate external rental expenses.

Furthermore, the board anticipates that the acquisition will facilitate future expansion and strengthen the group's overall research and development capabilities.

As the company has previously returned the land use rights for its R&D and production facilities in Shenzhen to the government, this acquisition provides the group with an alternative base to continue advancing its expansion plans.