Financing plan to include initial share offering and bond issue Hengda Real Estate, a mainland property company with developments in Guangzhou, plans to raise as much as US$1.3 billion to help it buy land, market sources said. The company intended to raise between US$500 million and US$750 million from an initial public offering in Hong Kong in the second half of next year, the sources said. It aimed to follow this with a convertible bond or straight bond offering of between US$250 million and US$500 million. Net proceeds from these financing plans could reach US$1 billion. The company was also seeking as much as US$300 million in pre-IPO financing from private equity players, the sources said. 'The company has very aggressive [land] acquisition plans and the key is whether it can get the land bank,' a person familiar with the company said. The plan mirrors the path taken by rivals such as Shimao Property Holdings and Greentown China Holdings earlier this year. Shanghai-based Shimao raised US$479 million from an initial share offering in Hong Kong in July and US$600 million from a bond sale last month. It was the largest dollar-denominated debt sale by a mainland developer. Zhejiang-based Greentown raised US$347 million in a July share sale and sold US$400 million in bonds last month. Shimao's shares closed yesterday at just over twice their IPO price while Greentown's stock has risen 76 per cent since its listing. Shimao's bonds yield 8 per cent while Greentown's yield 8.998 per cent. Comparable US treasury bonds yield 4.556 per cent. Hengda will compete for investor attention with several other potential property equity offerings. Sino Ocean Real Estate Development, a unit of Cosco, the mainland's largest shipping firm, plans to raise up to US$400 million in a share sale next year. Guangdong-based developer Country Garden plans to raise up to US$600 million. The government earlier this year introduced new taxes and raised borrowing costs in an effort to cool rising property prices. Despite these moves, investment in property development in the first 11 months of this year rose 24 per cent to US$210 billion, according to the National Bureau of Statistics. Meanwhile, unused commercial housing rose 8 per cent to 123.6 million square metres and vacant residential space increased 6.4 per cent to 67 million square metres, according to Xinhua.