'The firm will use the proceeds to finance new projects with a well-known international company. The projects include investments in hotels and residential apartments,' said a source close to the company.

Shimao has signed a preliminary agreement to buy a prime development site in Beijing for 1.4 billion yuan, according to sources.

The site is designated for a luxury hotel, offices, retail units and serviced apartments, providing a gross floor area of about 210,000 square metres.

Mr Hui could raise as much as HK$1.6 billion since he is offering 87.4 million shares in the deal. Shimao is selling 218.5 million new shares for up to HK$4 billion.

Mr Hui and his daughter Carol Hui Mei-mei could also use some cash as they are buying out Hong Kong-listed unit Shimao International Holdings for HK$870 million.

Mainland property developers are tapping the stock market for funds amid the rally. Shimao Property's shares have risen 29 per cent this year, outpacing the 4.4 per cent gain in the Hang Seng Index.

Rival developer Greentown China Holdings raised HK$2.31 billion from a share placement this week.

The company sold 141.5 million shares at HK$16.35 each in a deal arranged by JP Morgan and UBS. The price was set at the lowest end of an indicative range that went as high as HK$16.65.

Greentown's shares have gained 17 per cent this year.

The company plans to complete and deliver 24 residential projects with a saleable area of 1.26 million square feet this year, 60.89 per cent more than the 785,000 square metres last year.

By the end of last year, the developer had about three million square metres under construction. The company plans to start construction on sites of about four million square metres this year.

Cashing in

Shimao and owner take advantage of rising market to sell shares

The number of shares in millions being placed on the market: 305.8