Li Ka-shing ‘plans S$1.9b REIT IPO’

Hong Kong tycoon Li Ka-shing’s Beijing-focused real estate investment trust (REIT) plans to raise between 10 billion yuan (S$1.9 billion) and 12 billion yuan in an initial public offering (IPO) ahead of a Hong Kong listing on April 29, a person familiar with the situation said yesterday, in what will be the first yuan-denominated IPO outside mainland China.

News of the listing of Hui Xian REIT, part of Mr Li’s flagship Cheung Kong Holdings, comes less than three weeks after he raised US$5.4 billion (S$6.8 billion) from the Singapore IPO of Hutchison Port Holdings Trust, which owns deep-water ports in Hong Kong and China.

The planned REIT offering also comes as demand for yuan-denominated investment products in Hong Kong has been growing alongside the expansion of yuan deposits in the city. Those looking to invest their yuan in Hong Kong are currently limited to bonds denominated in the Chinese currency – “dim sum bonds” – which have taken off since global firms began selling them last year.

Hong Kong’s yuan deposits totalled 407.7 billion yuan at end February, up from 370.6 billion in January.

Hui Xian REIT, which started informal meetings with investors to gauge potential interest yesterday, will start the retail portion of the offering next Monday, with subscriptions ending on April 19, the source said, adding the company will price the deal on April 19.

The REIT is backed by Oriental Plaza, a commercial building in Beijing, people familiar with the situation said earlier. Cheung Kong owns 33.4 per cent of Oriental Plaza, while Hutchison Whampoa, also controlled by Mr Li, owns 18 per cent. CITIC Securities, BOC International Holdings and HSBC Holdings are handling the deal, people familiar with the situation said earlier.

Source : Today – 5 Apr 2011