Developer's move fails to dent investor interest in mainland property stocks Shui On Land is expected to face short-term financing pressure following its decision this week to shelve a $7.9 billion initial public offering as it seeks a way to cover the $4 billion yuan relocation costs at a project in Shanghai. The company, which has projects in Shanghai, Hangzhou, Wuhan and Chongqing, announced the decision to postpone the share sale on Wednesday due to deteriorating market conditions. However, it said in a statement that it would be looking for an opportunity to relaunch the offering. Shui On was offering 1.05 billion shares at between $5.60 and $7.55 each. On Sunday, it said the international tranche - 90 per cent of the deal - had been covered. But bankers said orders had been put in at the low end of the price range. Analysts and fund managers said Shui On was in immediate need of cash to resettle existing residents at the mixed-use Taipingqiao project in Shanghai and that the postponement of its share sale would put the company under funding pressure. 'It is certainly under pressure since the company needs the money to relocate residents. It requires cash and no financing is allowed,' said an analyst. Chairman Vincent Lo Hong-sui earlier said that the company needed capital expenditure of 3.5 billion to four billion yuan to relocate residents of the project. The Taipingqiao project is a huge mixed-use development with a gross floor area of more than one million square metres in the Luwan district that includes the popular Xintiandi commercial project. Mr Lo yesterday said in the announcement that Shui On had sufficient resources for its immediate needs and ongoing business development. 'All projects will proceed as planned,' he said. UBS analyst Eric Wong said investors were concerned that the high concentration of Shui On's projects would increase investment risks. 'Shimao Property [a mainland developer seeking a listing in Hong Kong] has more than 10 projects being developed in China compared with four by Shui On,' he said, adding that the risk to the company would be lower. Meanwhile, investors' appetite for mainland property stocks has not been dented by Shui On's aborted float with shares of Hopson Development Holdings rising as much as 18 per cent yesterday. Shares of Hopson, which claims to be the mainland's largest property developer as measured by size of land bank, at one point hit an intraday high of $17.50 before closing at $15.65, up 6.1 per cent from Wednesday. Guangzhou R&F Properties rebounded 3.71 per cent to close at $33.50, Hon Kwok Land Investment rose 3.47 per cent to $2.975 and Agile Property Holdings stock climbed 2.42 per cent to $4.225. In bid to curb China's overheated property market, the Ministry of Land and Resources this month slapped a ban on land approvals for the development of villas and low-density luxury housing.