Listing candidate Franshion Properties (China), a property unit of state-owned Sinochem Group, aims to almost double the proportion of its investment properties to up to 70 per cent to achieve a more balanced revenue profile.
The developer, which will launch its HK$3.316 billion initial public offering to Hong Kong punters today, plans to use the IPO proceeds to fund acquisitions of commercial buildings from its parent and the development of its property projects.
'Investment properties will comprise 50 to 70 per cent of our property portfolio in the near future,' chairman Pan Zhengyi said by videoconference yesterday.
At present, only 39 per cent of the company's properties are investment properties and the rest are development properties.
Mr Pan said increasing the proportion of investment properties could provide a stable recurrent rental income as well as to capitalise on future valuation gains.
'Our properties are all located in prime locations in first-tier cities, which will stand in those cities for 100 years. They will have a great potential for asset appreciation,' he said.