Cheung Kong Property Holdings, a real estate firm owned by Hongkong billionaire Li Ka-Shing, is reportedly selling its Shanghai project for RMB 20 billion ($3.22 billion).
The sale would mark one of China's largest real estate investment transactions, states Mingtiandi. The Shanghai property consists of 360,000 square meters of yet-to-be opened commercial and office space. The project, called Century Link, includes a 139,000 square meter shopping mall and a 130,000 square meter office space across twin towers. The Century Link towers is located above the Century Avenue metro station, east of Pudong's Lujiazui financial district. The project was designed by U.S. architecture firm SOM and is slated for opening in 2016. Construction for the Century Link towers is currently underway, even the leasing for the commercial and office spaces has already started.
According to the Wall Street Journal, Li's Cheung Kong Property Holdings placed the property on sale in June. Sources told the publication that the asking price is around 60,000 yuan ($9,646) per square meter. However, other details surrounding the potential was not disclosed.
In the report, the Wall Street Journal also cited several properties that Li has divested over the past years. Companies backed by the Hongkong billionaire or his family previously sold off five office building and shopping mall projects in Shanghai, Beijing, Nanjing and Guangzhou. Li's companies such as Hutchison Whampoa and ARA Asset Management Ltd., have been offloading several properties across the nation at its highest rate in more than two decades, given the decelerating China economy
And while industry watchers took this as a sign that Li is exiting the China real estate market, a few experts took this as part of Cheung Kong Property's strategy in order to invest in Europe, reports the South China Morning Post (SCMP). Alvin Cheung Chi-wai, an associate director of Prudential Brokerage, said that it has been the firm's strategy to dispose assets at high prices on the mainland, while making aggressive acquisitions in the West. He added, "The group is flush with cash, having sold a number of assets in the past two years. It will enhance its purchasing power once the property market in the mainland and Hong Kong enter a correction phase."
Meanwhile, a Shanghai based-property consultant also told SCMP that property owners selling their mainland real estate holdings does not necessarily mean investors are exiting the market. "If a company decides to sell a property when it receives a good offer, it's simply a commercial decision. The market shouldn't interpret it as leaving the market," the source said.
