PCPD sells Beijing complex to Gaw Capital for US$928m

Pacific Century Premium Developments, the real estate arm of PCCW, yesterday said it was selling a core Beijing property to Gaw Capital Partners for US$928 million.

In an announcement to the stock exchange, PCPD said it had conditionally agreed to sell the centrally located Pacific Century Place Beijing complex to Vinter Star, which is owned by real estate private equity fund Gaw Capital.

Majority owned by Richard Li Tzai-kai's PCCW, PCPD is mainly involved in the development and management of premium property and infrastructure projects.

The multipurpose complex comprises two luxury apartments, two grade A office buildings, a shopping mall and indoor parking. The 169,916 square metre property is in the prime Sanlitun area of Beijing's Chaoyang district.

However, the complex's occupancy has been down ever since the departure of a Taiwanese department store, which it has yet to fill.

Rental income from the complex amounted to HK$236 million last year, compared with HK$239 million in 2012. The average occupancy rate of the property was about 59 per cent.

Gaw Capital, which controls about US$8.5 billion in assets, has also invested in and managed properties in the neighbourhood such as Taikoo Li in Sanlitun, Hotel G Beijing and Embassy House.

It is not the first time PCPD has considered selling the property. In 2008, the company announced that it was in talks with a buyer and had asked for US$600 million. A similar announcement was again made in October last year.

The deal would be the latest major property asset disposal by the Li Ka-shing family since last year and is likely to reignite debate on whether the family is pulling out of the mainland.

However, PCPD chief executive Robert Lee said in a statement: "As a key driver of global economic growth, China remains our top priority for business investments."

Talks of a sale have helped push the share price of PCPD up. The stock has from HK$2.76 at the beginning of the year to HK$6.66 yesterday.