Hopewell to spin off Hong Kong property arm

Property and infrastructure group Hopewell Holdings announced yesterday it would spin off its property and hospitality business in a separately listed vehicle in Hong Kong after its proposed HK$9 billion hotel project in Wan Chai finally got off the ground.

"We studied the possibility of a spin-off several years ago, but the land premium settlement for Hopewell Centre II two or three months ago was the trigger point for the initial public offering," managing director Thomas Wu said yesterday. He did not disclose the amount it hoped to raise from the listing.

In June, Hopewell agreed to pay a land premium of HK$3.73 billion for the site on which it is building Hopewell Centre II.

The proposed spin-off company, in which Hopewell will retain a 51 per cent interest after its listing, will be called Hopewell HK Properties. It will be involved in Hong Kong property development and investment, property-related services, and hospitality.

The plan comes as Hopewell has two major development projects under construction that will need about HK$13 billion over the next five years.

Wu said in August that Hopewell would inject HK$4.55 billion into Hopewell Centre II's construction from 2013 to 2015. Factoring in the HK$3.73 billion land premium, the total investment cost of Hopewell Centre II will be about HK$9 billion.