CITY Pacific Limited has sold a 19.9 per cent share in CP1 Limited in two transactions worth about $38 million.

The transactions involve the sale of 17.9 per cent of the issued shares in CP1 to a Grocon Pty Ltd related entity as part of a strategic alliance between CP1 and Grocon. A further two per cent of CP1's issued capital will be sold to a third party.

City Pacific chief executive officer Phil Sullivan says the deal will allow the company to continue to introduce 'high-quality property development email opportunities to CP1'.

"This alliance allows all three companies to identify and unlock new growth Internet opportunities in their respective fields of financial services, property development and construction," he says.

The share sale is in line with City Pacific's objective of reducing its 50 Market Street controlling interest in CP1. City Pacific will reduce its board to two members and retain a 30.6 per cent share of CP1.