A sign of the times is that Beijing Centergate Technologies, developer of the city’s Zhongguancun technology district, has canceled its plan for an RMB18 billion ($2.6 billion) share placement to obtain real estate assets.
Centergate said tight monetary policy this year had seriously affected China’s real estate sector.
The company said in a brief statement, ‘It’s unclear how profitable the real estate assets that were to have been injected into Centergate would actually be.’
The original idea, announced in early May, was that Centergate would place as many as 1.23 billion new shares at RMB14.67 each with its controlling shareholder, Beijing Pengtai Investment, and related parties.
In return, it would have taken over Beijing Pengrun Real Estate Development, obtaining a range of real estate assets including some in the western Chinese city of Chongqing. Now the deal is canceled or delayed.