As many as a dozen mainland property developers, emboldened by a recovery in the nation's property markets, are eager to raise billions of dollars by going public in Hong Kong, even as Beijing warns of a possible bubble in the housing market.
Guangzhou's Evergrande Real Estate plans to raise as much as US$1 billion through a Hong Kong initial public offering by the end of the year, and had recently taken potential investors on tours of its building sites in Guangzhou, Chongqing and Wuhan, bankers and fund managers close to the deal said.
Shanghai's Glorious Property Holdings and Shenzhen's Fantasia Group were also planning major Hong Kong IPOs, investment bankers familiar with the plans said.
Glorious, which owns land along the upscale Bund in Shanghai, hopes to raise US$1 billion, while Fantasia aims to raise about US$500 million to develop mid-to-high-end residential and commercial projects in the Pearl River Delta region.
The three listing hopefuls, and others lining up behind them, have been encouraged by the huge run-up in the Hong Kong stock market - which has risen more than 60 per cent since March - and signs the mainland property market is recovering. So far this year, housing prices in major cities such as Shanghai and Beijing have risen 20 per cent to 30 per cent, property agents say.
But the sharp rebound in the mainland property market already is ringing alarm bells.
A Xinhua commentary at the weekend said 'the ferocious surge in the home market defied the sensible big picture' and questioned the legitimacy of the latest boom.