China Vanke to launch offshore push from HK
China Vanke, the biggest mainland-listed property developer by sales, plans to set up an overseas headquarters in Hong Kong in the second half of this year, a move aimed at stepping up its overseas expansion.
Company president Yu Liang disclosed the plan at an internal staff meeting in Xian, Shaanxi province.
'The [overseas business] department will be set up in the second half and the headquarters will be set up in Hong Kong,' Yu was quoted on the company's official microblogging account yesterday as saying. Yu did not give any details, but he said the company would first consider investing in developed markets such as the United States.
A spokeswoman for China Vanke declined to elaborate.
The new headquarters plan comes a month after China Vanke said it was buying a 74 per cent stake in Hong Kong-listed Winsor Properties for HK$1.08 billion.
At the time, China Vanke said the purchase was part of its global expansion plans.
The company said then that internationalisation was a long-term direction it needed to consider, and the acquisition was part of the preparatory work.
At the staff meeting, Yu also cautioned that there was no single solution that could help the company sustain its top status.
'In the face of the changing market, the most important point is who can correctly identify the market trend,' Yu said. By that, the microblog post said, he meant trends regarding the development direction and opportunities in various cities.
Property analysts said a drop in home prices and sales on the mainland because of government curbs on the real estate market were pushing China Vanke abroad.
'They may buy some completed investment properties as a first step to gain some market knowledge rather than jumping into the development business,' Alan Jin, who tracks property at Mizuho Securities, said. 'But I guess the initial scale of the investment will not be significant.'
China Vanke isn't the only developer trying to expand outside the mainland. China Merchants Property Development last month bought into Hong Kong-listed consumer electronics maker and retailer Tonic Industries. And last year Gemdale, a Shanghai-based real estate developer, made an unsuccessful bid to acquire a 61.96 per cent stake in Hong Kong-listed Chi Cheung Investment, a property development and securities investment company, for HK$836 million.
China's Vanke's rise in first-quarter profit this year•Net income for the period was 1.4 billion yuan