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Peggy Sito

Reuters

Li Ka-shing, the richest man in Asia, is making a new investment, but instead of investing in real estate, which has helped him make the bulk of his wealth, he is taking to the air.
In a further step to diversifying his investments and business risk, Li is reportedly aiming to buy his way into the global aircraft leasing business.
Cheung Kong (Holdings), of which Li is the chairman, is in discussions to form a joint venture with Mitsubishi's MC Aviation Partners leasing arm, Reuters quoted a source as saying.
Cheung Kong is already bidding for a US$5 billion fleet of 100 planes that lessor AWAS Aviation Capital has put up for sale.
Cheung Kong was unavailable for comment yesterday.
The potential investment comes as the property heavyweight has been staying away from the city's land market. It has not won any of the 69 sites tendered by the government, MTR Corp and the Urban Redevelopment Authority since last year,
The company even did not submit a bid in some government tenders, such as the ones for two residential sites in Tin Shui Wai in July, according to analysts.
Alfred Lau, an analyst at Bocom International, said diversification was sensible because real estate was not in a profitable cycle at the moment.
"Taking into account its cycle, investors find it difficult to profit on real estate, no matter whether they are in Hong Kong or on the mainland," Lau said. "It is sensible to sell and look for investments elsewhere with better return."
Cheung Kong and its associate Hutchison Whampoa have been disposing of assets in Hong Kong and on the mainland.
The series of sales triggered debate whether the group is pulling out of Hong Kong and the mainland, which has been repeatedly denied by Li.
Hutchison said last month it was planning to sell its 71.36 per cent stake in Hutchison Harbour Ring to Shenzhen-listed Oceanwide Holdings for between HK$3.5 billion and HK$3.8 billion.
Three commercial properties - in Shenzhen, Guangzhou and Shanghai - owned by Cheung Kong and Hutchison were sold for a total of 12.8 billion yuan (HK$16.1 billion) last year.
According to Reuters, the venture with MC Aviation, which owns and manages about 100 mostly narrow-body jets, will give Cheung Kong access to a pool of about 20 aircraft.
Details of the venture are still being worked out and an announcement is expected in a couple of weeks.
The planned MC Aviation and AWAS deals are not the only aircraft leasing avenues Li is exploring.
Cheung Kong has also approached large lessors to buy about 20 planes in a single transaction, according to Reuters.
Dewey Yee, the chairman of Future Gate Finance and an aircraft leasing expert, said: "Cheung Kong has been liquidating its property companies and is putting its capital in something similar that would give it a steady return."
Aircraft leasing was a good fixed-income product that required specialist knowledge, Yee said, and Cheung Kong had been making a series of moves into aviation.
Additional reporting by Sijia Jiang


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Li Ka-shing

Li Ka-shing charges into aircraft-leasing business

Li Ka-shing has been selling his assets but he says he is not pulling out of the city. Photo: Reuters

Cheung Kong sticking with mainland market, though cautious short term

Cheung Kong executive director Justin Chiu-Kwok-hung said the firm remained confident in China’s market outlook in the medium to long term and would continue its investments on the mainland. Photo: Felix Wong

Cheung Kong in talks to buy aircraft from leasing firm

Cheung Kong is in talks to buy planes from Dublin-based Awas, which plans to break up its fleet of about 280 planes and sell about 100 newer aircraft, including Airbus and Boeing planes. Photo: AFP

Li Ka-shing had already bought into the telecommunications sector in Ireland and an airport parking complex in Canada.

Li Ka-shing's Cheung Kong firms to acquire Australian gas pipeline firm Envestra

Australia, home to some of the world's biggest gas reserves, has seen rising international interest in its energy sector. Photo: Bloomberg

CKI's Kam Hing-lam noted that the firm's investment in Envestra in 1999 was its first entry into the Australian market. Photo: Nora Tam

Business

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Cheung Kong in talks to form joint venture with MC Aviation Partners and buy 100 planes from AWAS Aviation Capital for US$5 billion


Li Ka-shing, the richest man in Asia, is making a new investment, but instead of investing in real estate, which has helped him make the bulk of his wealth, he is taking to the air.


Cheung Kong

Li Ka-shing charges into aircraft-leasing business

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Cheung Kong in talks to form joint venture with MC Aviation Partners and buy 100 planes from AWAS Aviation Capital for US$5 billion

Cheung Kong in talks to form joint venture with MC Aviation Partners and buy 100 planes from AWAS Aviation Capital for US$5 billion