Opinion | Market kept guessing over potential buyer of PCPD asset

Last week's announcement by Pacific Century Premium Developments that it could sell Pacific Century Place, a core Beijing asset, has triggered a guessing game over the buyer.

PCPD, the real estate unit of Richard Li Tzar-kai's PCCW, on January 13 said the sales plan was "at an advanced stage" of talks. There's yet to be any decision on the disposal and PCPD has neither mentioned the value of the deal nor a timetable for the transaction, but sources said the sale could fetch more than US$900 million.

The possibility of the sale has already revved up PCPD's stock, which has risen more than 46 per cent since the talks were announced. Fund managers and investors are naturally keen to find out if the deal will indeed close and if it does, the identity of the buyer, because this is not the first time the market has heard talks of the property's sale.

In 2008, the company announced that it had been approached by a buyer for the property. A similar announcement was again made in October last year.

"Investors have showed interest in the property from time to time but the company seems to pull back after going into negotiations. Sometimes we doubt if they really want to sell the property," said an observer familiar with the situation who did not want to be identified.

The complex has been going through a bad patch since the departure of a Taiwanese department store. According to PCPD's interim result report to June 30, the average occupancy rate of the property was about 61 per cent. Gross rental income stood at about HK$119 million for the six months, unchanged from the same period the previous year.