It looks fairly certain Henderson China is going to get away. But the successful listing of the company does not signal it is time to hang out the bunting to celebrate the beginning of a new boom in property development investment in China. Last night brokers seemed pretty confident the institutional offering of new shares in the company was three times subscribed. The listing has come about after the issue of US$460 million of convertible bonds in 1993. The bonds were due to be converted into Henderson China shares on or before the bond maturity date, this October. Otherwise Henderson Land, the issuer, faced coughing up the whole amount redeemable in cash. The conversion of bonds represents $3.5 billion of Henderson China shares. The remaining $1.48 billion of shares has been split, with 85 per cent going to the institutions. This is the bit that has been heavily subscribed. The investment backdrop to the book building, which closed last night, was not conducive to a successful issue. Success came in the face of poor sentiment towards property in China, rising China Taiwan tension and wobbles in global equity and bond markets. The balance of shares remaining in the issue, not going to institutions, amounts to about $250 million and is expected to go to the public. Near the end of the book building with institutions, extra discount to the net asset value per share was offered in the final pricing of the offer. This amounted to five percentage points above expectations at 25 per cent. Cynics argue the extra discount on the pricing indicates how desperate Henderson Land and the underwriters were to get the issue away. Of course you might ask exactly how much did Henderson Land actually give away. At the end of December, 1995, an $8 billion surplus arising on the revaluation of the group's property interests was lumped on to the company's assets. A combination of factors have made the Henderson China listing possible. Already the surplus in property valuation has been alluded to. This offered some flexibility in setting the discount on pricing. It looks like the flexibility was fully used. On a less cynical note, Henderson Land has shown what can be done if you put a bit of long-term planning in. The reason why Henderson China is probably going to get away is as an investment it does not rely on pie in the sky scenarios for success. Henderson China has three key assets which are either kicking earnings in during 1996 or are due to kick in by 1998. They are Beijing Henderson Centre, in Dongeheng District, Beijing, Shanghai City, in Zhabe District, Shanghai and the Xujiahui Commercial City, in Xuhui District, Shanghai. Henderson China in Beijing, Shanghai and Guangzhou has tried to develop good key city urban centres within easy reach of transport hubs. They are also hybrid developments comprising office, residential, commercial and retail podium space. The group can show an audited three-year track record, but more importantly, Henderson has shown it is able to deliver projects in China, in time, near budget and with profits to book to boot. Not many companies in the world, let alone in Hong Kong, have the balance sheet strength, or the knowhow, to do this. It is for these reasons Henderson China, although a landmark success story for property development in China, should not be taken as the beginning of a new China property investment boom.