Guangzhou Investment firms up reit plans
State-owned developer Guangzhou Investment is pushing ahead with plans to list a real estate investment trust (reit) in Hong Kong based on its $2 billion Guangzhou commercial property portfolio.
The reit is competing with the Housing Authority's Link Reit to be the first listed on the Hong Kong stock exchange.
The authority won the right to revive the Link Reit last month when the Court of Final Appeal dismissed a challenge that had held up the offering for eight months.
The Link Reit, now likely to list by early next year, is expected to include car parks and retail properties worth $23 billion.
Chinese newspapers reported yesterday that Guangzhou Investment hoped to list its reit in October.
'The plan is pushing ahead but the timetable has not been finalised,' a Guangzhou Investment executive said.
HSBC, Citicorp and DBS are believed to be the arrangers of the deal. All declined comment yesterday.
In June, Guangzhou Investment confirmed it was looking at ways to strengthen its financial position, citing a reit as an option.
A reit is a listed fund holding a pool of rental properties with fixed returns such as car parks, shopping centres and offices.
Guangzhou Investment's leased properties total about 600,000 square metres, mostly in Guangzhou, according to its annual report. It earned $367 million in rent last year.
It has a strong presence in Guangzhou's central business district, Tian He, including core properties such as Victory Plaza, Fortune Square, Hong Fa Building and City Development Plaza.
Guangzhou Investment had planned to float its portfolio in Singapore but chose Hong Kong when the reit code was eased with the lifting of a ban on overseas investment.
