Lai Sun hopes to reap $1b from China-arm spin-off
Lai Sun Development Co expects to raise about $1 billion for working capital from the flotation of its China property arm, Lai Fung Co.
Director and senior vice-president Julius Lau Shu-yan, speaking after the topping-out ceremony for Eastern Place in Guangzhou yesterday, said the proposed spin-off was expected to be completed in September.
The group had sold 300 flats in Eastern Place, each worth about $800,000, providing revenue of about $240 million.
Mr Lau said the group had invested $2.2 billion in China through Lai Fung and its land bank in China was enough for developments for the next five years.
Cost of the mainland property investment was less than 10 per cent of its asset value.
Mr Lau said the commercial space in the company's massive development at the Metro Station in Guangzhou's Zhongshan No 5 Road would go on pre-sale by the middle of the year.
The 20-storey project had 100,000 square feet of retail and commercial space and would become a major shopping centre. .
The $1.5 billion Eastern Place consists of 2,000 flats in eight residential towers, and three top grade office towers.
Two residential towers with 500 flats have been completed. The project was expected to be completed in four years, Mr Lau said.
For the fiscal year to July, Lai Fung made a net profit of $90 million.
Mr Lau said the market value of its China property portfolio was about $6 billion.
Stephen Yuen Ching-bor, senior vice-president of Lai Sun's China division, said it was negotiating to sell 180 luxury flats of Hong Kong Plaza in Shanghai for about $480 million.
'We expect an agreement to be signed in two weeks,' he said.
Mr Yuen said the group would slow property sales until Lai Fung was floated.
