Swire Pacific’s decision to spin off its property unit is part of its plan to raise funds for new projects in Hong Kong and China, where property prices surged last year.
Swire Properties plans to increase capital expenditure to $607.7 million in 2010. Swire Pacific has received regulatory approval to spin off Swire Properties, and people familiar with the matter said it could raise up to US$3 billion via the initial public offering.
Swire Properties, which has projects in Beijing, Shanghai and Guangzhou, said it intends to expand its operations to Chengdu, which could serve as a base for its operations in western China as the capital city of Sichuan province has a large population, strong economic growth and spending power.
Wall Street Journal reports that although Swire Properties only has commercial projects in China, it said it may expand into the country’s residential market, targeting the luxury sector.