Cheung Kong Property Holdings, the real estate company belonging to billionaire Li Ka-shing is reportedly selling its Century Link commercial project in Shanghai for RMB 20 billion ($3.22 billion).
Should the sale of the as-yet-unopened 360,000 square metre Pudong complex be completed at the rumoured price, the Century Link deal would be among the largest investment transactions in China’s real estate market to date.
The sale, which has been reported widely in the local Shanghai media, would also mark the seventh major mainland property asset that Li’s companies have disposed of in the last two years.
While Li’s property sales have brought in more than $3.4 billion for the investor known in Hong Kong as Superman, the string of disposals has also led many to conclude that the billionaire is exiting the mainland real estate market.
Century Link Buyer Still Unconfirmed
The reports of Li’s latest sale have lit up the local business pages in Shanghai, but an eventual buyer for the property has still yet to be identified. If local press reports are to be believed, there are multiple bidders for the Century Link complex, including both foreign and domestic players.
The Century Link complex includes a 139,000 square metre mall and 130,000 square metres of office space across twin towers. The project, which was designed by US architecture firm SOM, is scheduled to open in 2016 and has already begun leasing.
Century Link, is located on above the Century Avenue metro station east of Pudong’s Lujiazui financial district, along Century Avenue.
So far, Cheung Kong (CK) Property has refused to comment on what it is terming market rumours. The company purchased the site in 2005 for RMB 12,000 per square metre, and should a deal go through at the reported price, would be receiving RMB 55,555 per square metre for the nearly completed project.
Does Li’s Latest Sale Mean Mainland Real Estate Boom is Over?
The potential sale of Century Link is raising questions in the local press about what this latest disposal by the Hong Kong billionaire means for the mainland property market.
Li’s moves are watched like the pronouncements of a market oracle in Hong Kong, and the billionaire, whose worth is estimated at $27.1 billion by Forbes, has a substantial following on the mainland as well.
The asset disposals kicked off in 2013 when Li sold a mall in Guangzhou for $390 million in September of that year. That sale was followed just one month later by Li’s record-breaking $1.15 billion sale of the Oriental Financial Center in Pudong.
Altogether in the last two years, Li’s companies have made six major deals to dispose of seven properties in China, according to Mingtiandi’s databases of mainland property transactions, without making any new real estate acquisitions in the country.
Li has steadfastly denied that his companies are exiting the China market, and has continued to pronounce his faith in the mainland’s economic future.
Despite such assurances, Li’s family members have also been dumping their mainland holdings, with son Richard selling a Beijing commercial complex for $900 million in early 2014.