PCPD in talks for sale of prime Beijing property

Negotiations between PCCW's real estate unit and a potential buyer of commercial complex coincide with rising rents in capital

PUBLISHED : Tuesday, 14 January, 2014, 1:42am
UPDATED : Tuesday, 14 January, 2014, 1:42am

Pacific Century Premium Developments (PCPD), the real estate unit of Richard Li Tzai-kai's PCCW, is in talks with a potential buyer to sell its commercial complex in Beijing, estimated to be worth about US$900 million.

The company did not identify the potential buyer of its Pacific Century Plaza in the capital and no binding agreement has been reached, the company said in a filing to the Hong Kong stock exchange yesterday.

PCPD said in October it was approached by potential buyers for its stake in the development.

The multipurpose complex comprises two luxury apartments, two grade A office buildings, a shopping mall and indoor parking. South of the Gongti North Road in the prime Sanlitun area of Chaoyang district, the property has a total area of 169,916 square metres with 861 parking spaces.

"Talks on the sale lasted several years and the indicative price of the property changes from time to time, from US$500 million to the latest indicative price of US$900 million," a market observer said. The selling price varied on the disposal structure and whether the landlord wanted to sell the asset directly or via an offshore vehicle, he said.

Analysts say prices and rents of Beijing office properties have been rising due to limited supply. In the fourth quarter of last year, the average price of overall grade A office space in Beijing increased 0.67 per cent from the previous quarter to 63,492 yuan (HK$81,464) per square metre, according to a report from property consultancy DTZ last week.

DTZ said no other new projects were expected this year. Rents in 2014 are expected to increase steadily as the vacancy rate falls.

Shares in PCPD surged 15 per cent to HK$3.07 before trading was halted yesterday, while PCCW shares slid 0.8 per cent to HK$3.57. The stocks will resume trading today, according to the announcement.

Separately, PCCW's telecommunications arm HKT yesterday unveiled a co-operation with mainland smartphone brand Xiaomi that it hopes will spur more of the network operator's 2G mobile users to adopt 4G and 3G services.

HKT group managing director Alex Arena said Xiaomi's Hongmi smartphone, which costs HK$999, "will fit a market niche in Hong Kong".

"A number of people have been taking 2G services and missing out on smart data services because they haven't had an adequate and affordable smartphone … this is an absolutely perfect entry strategy," Arena said.

Based in Beijing, Xiaomi last year started initiatives to expand its smartphone business outside the mainland. The privately held company last month sold 10,000 smartphones in 36 seconds during its first online "flash sale" for Hong Kong consumers.

Three Hong Kong yesterday said it would also carry the Hongmi. HKT will have the device available from Monday.