Mainland developer Sunac China’s property management arm seeks at least US$1 billion in Hong Kong IPO, say sources

Sunac Services, the property services arm of China’s fourth largest developer, is aiming to raise US$1 billion to fund new acquisition opportunities

Shares of Shimao Services, one of the two property management companies to debut in Hong Kong on Friday, plunged nearly 23 per cent

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Sunac China Holdings is preparing to spin off of its property management arm in Hong Kong. Photo: Reuters

Published: 6:57pm, 30 Oct 2020Updated: 6:57pm, 30 Oct 2020

Sunac Services Holdings, the property management arm of the mainland’s fourth-largest developer Sunac China Holdings, is looking to raise at least US$1 billion in a Hong Kong listing, joining a slew of companies who have launched IPOs recently, according to people familiar with the transaction.

The company has already started pre-marketing activities to potential institutional investors, with plans to use the initial public offering proceeds to fund expansion and acquisitions, these people said.

The deal’s joint sponsors, HSBC and Morgan Stanley, were not immediately available for comment.

Shimao Services, the services arm of Shimao Group raised HK$9.8 billion (US$1.26 billion), while KWG Living mopped up about HK$3 billion, with both companies making their debut on Friday. KWG Living’s shares plunged 22.9 per cent to HK$6.08, while Shimao Services closed unchanged at its listing price of HK$16.6 after dipping nearly 10 per cent to HK$15.

A logo of Evergrande Group is seen in front of a construction site in Guangzhou, Guangdong province, in this 2014 file photo. Photo: Reuters

China Evergrande, the world’s most indebted property developer, has also applied to the Hong Kong stock exchange to spin-off and list its Evergrande Services unit, targeting to raise at least US$1 billion in December at the earliest, according to people familiar with the matter.

The stock market fortunes of these property management companies have been a roller-coaster ride this year as the favourable trading conditions in the first half have mostly vanished. The average stock price of some 30 property management companies listed in Hong Kong surged by 68 per cent between January and August, but they have since declined by more than 30 per cent, according to research from Jefferies Hong Kong.

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