Shimao to buy more land-use rights
Listing candidate Shimao Property Holdings, one of the mainland's biggest holders of undeveloped land, plans to spend eight billion yuan to obtain land-use certificates this year and next.
Chairman Hui Wing-mau yesterday said the firm had certificates for 65 per cent of its land reserves and would spend 2.3 billion yuan this year and 5.5 billion yuan next year on certificates for the rest.
In the three months to March, Shimao's property sales totalled $5.5 billion, Mr Hui added. The land, for which Shimao has yet to obtain certificates, is meant to accommodate 8.32 million square metres of gross floor area, according to the prospectus for its initial public offering, which opens today.
As of the end of December, the developer had land-use rights valued at 1.88 billion yuan and land-use rights under development of 2.3 billion yuan.
Only last week, Shui On Land, another mainland developer, shelved its initial public offering indefinitely after missing its fund-raising target. Investors are worried about the growth prospects for the property market as Beijing tries to rein in runaway home prices with administrative measures.
Mr Hui said international investors' response to Shimao's share sale had been better than expected and recent fluctuations in the housing market had had little impact on the company.
Executive director Jason Hui Sai-tan said overseas investors accounted for 40 per cent of Shimao's sales in Shanghai; nationwide, they made up 10 per cent.
Shimao will offer 595.12 million shares at $6.25 to $8.50 apiece. Ten per cent of the issue is reserved for retail investors. It could raise as much as $5.05 billion. Of this, it plans to use $2.11 billion to finance existing projects and $1.05 billion to finance new projects, including land acquisitions.
The chairman said the company planned to pay out 30 per cent to 40 per cent of its earnings as dividends starting this year.
Shimao's shares are expected to begin trading on July 5.
Morgan Stanley and Goldman Sachs are arranging the initial public offering.
