Asia’s richest man continued to sell off his China real estate holdings last week when a property company controlled by Hong Kong billionaire Li Ka-shing was acquired by China’s Oceanwide Holdings.
According to a statement to the Shenzhen stock exchange dated November 7th, China Oceanwide, a listed real estate investment firm belonging to Chinese billionaire Lu Zhiqiang, agreed to buy Hutchison Whampoa’s 71.36 percent stake in Hutchison Harbour Ring Ltd for HK$3.8 billion ($621 million).
Hutchison Whampoa is one of Li Ka-shing’s primary holding companies, and Hutchison Harbour Ring Ltd owns two commercial buildings in Shanghai, Harbour Ring Huangpu Centre and Harbour Ring Plaza.
Following the transaction Hutchison Whampoa will have completely divested itself of its shares in Hutchison Harbour Ring Ltd, and Li Ka-shing will have sold off his fifth set of China real estate assets in the last fourteen months.
Huangpu Buildings Continue Li Ka-Shing’s String of China Sales
Starting in 2013, Li took a bearish stance on China’s property sector, stating publicly that land prices had gone too high. Since that time the property baron has sold buildings in Shanghai, Guangzhou and Nanjing.
In August, Li’s ARA Asset Management sold the Shanghai International Capital Plaza in Shanghai’s Hongkou district to a Singapore-based real estate private equity fund for a reported RMB 1.54 billion.
During February of this year, Li’s ARA Asia Dragon Fund sold the Nanjing IFC for RMB2.48 billion to Nanjing-based investment firm SanPower Group.
The Nanjing sale was preceded in October last year by the sale of the Oriental Financial Centre in Shanghai’s Lujiazui area for US$1.155 billion by Li’s Cheung Kong Holdings, together with Hutchison.
Just one month before, Hutchison and Cheung Kong had announced that they were selling the Metropolitan Plaza in Guangzhou’s Liwan district for US$390.7 million.
In addition to Li himself, the billionaire’s family members have been selling out, with son Richard selling a Beijing mixed-use development for US$900 million during January.
Selling Assets in Downtown Shanghai
The 36-storey Harbour Ring Plaza was completed in 1998 and the 22-storey Harbour Ring Huangpu Centre in 1996, and both buildings are near Shanghai’s People’s Square in the city’s centrally located Huangpu district. The two structures are described by brokers familiar with the market as B grade assets.
Making the sale price per square metre for the transaction a bit challenging to figure is the mixed ownership of the two buildings with a number of floors in each tower having been sold off to individual occupiers or investors on a strata title basis.
Superman Looking for Other Areas to Invest
While the billionaire investor referred to by many as “Superman” is selling off his China real estate, he’s not parking his money on the sidelines.
On Thursday Li’s Cheung Kong Holdings said it had agreed to buy stakes worth $2.02 billion in about 60 aircraft as part of the property firm’s push into airplane leasing.
Mr Li is also reportedly redirecting his investment activities to Europe. According to media reports, Hutchison Whampoa signed five investment deals in Europe last year, with a total value of more than $4 billion.
Oceanwide Buying in China and the US
The acquisition by Oceanwide, is the latest step in an aggressive year of expansion for the Beijing-based company.
In late December last year the developer took on the $200 million Fig Central Project in Los Angeles, making it one of the earliest of China’s real estate developers to make major acquisitions in LA.
Then during September, Oceanwide sold a $320 million offshore bond to back development of Fig Central, as well as potential further deals.