By Wayne Ma 
 

China South City Holdings Ltd. (1668.HK), the builder of so-called wholesale malls in China, said Wednesday that it signed a two-year HK$600 million (US$77.4 million) unsecured loan agreement with HSBC Holdings PLC.

The company said in a statement that the loan has an interest rate comprising the Hong Kong interbank offered rate, or HIBOR, plus 2.65 percentage points a year.

"This reflects HSBC's full confidence in the group's business outlook and financial position," China South City said in the statement.

The loan comes as China South City embarks on an expansion of its wholesale malls, known as integrated logistics and trade centers, that bring wholesalers from different industries together under one roof.

The company's chief financial officer, Stephen Fung, has said that China South City wants to build as many as two new malls a year to take advantage of cheap land and government incentives that have encouraged wholesale vendors to move out of major urban areas.

Write to Wayne Ma at wayne.ma@wsj.com

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