[photopress:real_estate_Zhengshou__Henan_Province.jpg,full,alignright]Central China Real Estate, the developer based in Zhenghou in Henan Province (shown in our illustration), may raise as much as $244 million through an initial public offering in Hong Kong.
The company plans to sell 500 million shares — about a 25% stake — at US$0.35-0.49 a share.
Singapore’s CapitaLand, the largest property developer in Southeast Asia, has a 36% stake in Central China. If the listing goes through, it will be the first share sale in Hong Kong by a Chinese real estate developer since Zhang An Real Estate’s US$461.55 million IPO in November.
The sale will test investor demand for Chinese property stocks after two developers shelved Hong Kong IPOs this year as shares slumped and the government sought to damp real estate investments and prices.
The price range values Central China at as much as $975 million, 40 percent less than its estimated net asset value this year, based on a May 10 report by BOC International which is helping manage the sale. At the end of March, Central China had land reserves of 4.8 million square meters with land use rights certificates, expected to be sufficient to cover its development needs for the next three to four years.