Poor performance of Champion Reit casts shadow over China developer Shimao Property Holdings has been asked by the stock exchange to provide additional information for its US$400 million initial public offering, a move that may lead to a delay for its share sale to the end of next month, according to sources. Sources had earlier said Shimao Property would start its preliminary marketing this week and open the retail offering in mid-June. But the firm will now need an additional week to satisfy the stock exchange's inquiry about the listing. Some analysts said the delay was due to Champion Reit's weak debut and sharp fall on the Hang Seng Index and that it could affect Shimao's offering. Shares in Champion Reit fell 2.33 per cent to close at $4.20 yesterday following a 15.68 per cent plunge on their debut. At the same time, the benchmark Hang Seng Index has fallen more than 10 per cent since it hit 17,301 - near a five-year high - on May 8. The index fell to a two-month low yesterday on speculation that there may be further interest rate hikes, with property stocks dropping across the board. Mainland property stocks have been under selling pressure since May 8, with Agile Property Holdings falling 27.13 per cent and Guangzhou R&F Properties dropping 17.73 per cent. Sources said that the market was worried that another round of austerity measures imposed by the central government would further curb property prices in major cities such as Shanghai and Beijing. This could well affect Shimao Property since a third of its projects are located in Shanghai. Shimao Property has 11 residential projects in Shanghai, Beijing, Nanjing, Fuzhou, Harbin, Kunshan, Changshu and Wuhan with a planned gross floor area of 10.14 million square metres, scheduled to be completed by 2010. A spokesman at Shimao declined to comment, saying that the company had not announced any listing timetable. Morgan Stanley and Goldman Sachs are arranging the sale.
