Swire plans HK$10b office tower project in Quarry Bay's Taikoo Place
Property firm announces cost of huge Quarry Bay project as shares fall on surprise stock placement
Swire Properties says plans to turn three industrial buildings in Quarry Bay's Taikoo Place into two grade A office towers will cost HK$10 billion in construction costs alone and could be the company's biggest investment in a project in a decade.
The announcement of the investment cost came as shares declined on a surprise stock placement by its ultimate controlling shareholder.
The company's shares fell 4.19 per cent to HK$22.85 yesterday after John Swire & Sons (HK) announced it would sell 234 million shares at HK$21.53 per share, representing a discount of 9.73 per cent to Monday's closing price of HK$23.85.
The placement made Swire Properties the most active trading stock, with HK$11.4 billion worth of shares changing hands, and lifted daily turnover to HK$56.12 billion, compared to HK$36.14 billion on Monday.
After the completion of the sale, John Swire & Sons (HK) will raise about HK$5 billion and cut its shareholding in Swire Properties to 3.71 per cent, from 7.71 per cent. John Swire & Sons (HK) is a wholly owned subsidiary of John Swire & Sons, which owns 44.1 per cent of Swire Pacific. Swire Pacific holds 82 per cent of Swire Properties. Swire Pacific shares also eased 0.21 per cent to HK$91.9.
According to a joint announcement issued by Swire Pacific and Swire Properties, John Swire & Son (HK) said it would not sell its remaining share in Swire Properties for a period of 90 days from the date of completion of the share sale.
CLSA analyst Danie Schutte wrote in a research note that Swire Properties had been trading only US$6.9 million worth of shares a day and missed the radar of many investors due to the limited free float of only 10 per cent and the tight liquidity.