[photopress:real_estate_Sogo_China.jpg,full,alignright]Chinese property developers are racing to fill their war chests — and empty them again — as competition for the best remaining land intensifies.
Even as the Chinese government moves to restrict bank lending to property developers, companies are finding ample sources of capital through bond issuance and stock listings in Hong Kong and Shanghai.
A good example is shown in our illustration. This is Pan Shiyi, left, and Zhang Xin, the husband-wife tycoons who founded SOHO China, which spent $300 million of its recently raised $1.65 billion on two high-end properties in Beijing. Zhang Xin said in a recent interview that the developer was ‘actively looking’ for potential acquisitions in other cities.
Industry consolidation means the more powerful developers incorporate their smaller rivals.
SOHO as an example again. Apart from buying two high-end properties in Beijing in the process it swallowed the two developers that owned them — Beijing Yeli Real Properties Development and Beijing Millennium Real Properties Development.
So far this year, mainland property companies have raised US$12.9 billion in initial and follow-on stock offerings in Hong Kong, Shanghai and Shenzhen. That is nearly triple the amount raised a year earlier.
According to data tracker, Dealogic, it is more than 12% of the total $103.8 billion drummed up in all Chinese company listings on the three markets this year and nearly double the 6.4% of last year.
Most of the government’s administrative measures appear to be clearing out the smaller companies in favor of their better-capitalized rivals. A much fuller account can be viewed by clicking on Source.
Source: Wall Street Journal