Hong Kong’s surging stock market has attracted a new influx of IPOs, including two China real estate firms planning new listings within the next 30 days.
According to media reports, hotel trust Jinmao Investments and Jinmao (China) Investments Holdings, which was recently spun off from mainland developer Franshion Properties today started taking orders for an IPO worth up to US$437 million.
After first being announced in March, the Hong Kong IPO is slated for July 2nd, and would give investors access to income from six hotels across China, including the Renaissance Beijing Wangfujing Hotel, the Westin Beijing Chaoyang, the JW Marriott Shenzhen, the Grand Hyatt Lijiang, and the Grand Hyatt Shanghai (which is housed in the city’s iconic Jin Mao Tower in the Lujiazui financial district). The entire Jin Mao Tower, which includes office and retail space, is included in the trust.
A story in the Wall Street Journal indicates that Warburg Pincus, along with three other investors have already taken up 10 percent of the hotel trust’s IPO for around U$40 million.
By listing its hotel assets in Hong Kong, Franshion, whose share price has slid more than 16 percent in the last six months, has an opportunity to add cash to its balance sheet at a time when many of China’s residential developers are being squeezed by the recent slowdown in the housing market.
Dalian Software Park Developer Also to List
The second IPO, which is scheduled to price on June 20th and list on June 27th, is by Yida China Holdings, the developer of the successful chain of Dalian Software Park (DLSP) projects across China. The business park builder’s listing could be valued at as much as HK$1.7 billion (US$219 million), and has already attracted a number of cornerstone investors, including Chinese “bad asset” bank China Cinda (HK) Asset Management which has subscribed to HK$310 million in the new shares.
Among the other cornerstone investors Huarong (HK) International Holdings has signed up for HK$233 million in shares, and CIG Trustee is in for HK$155m. Shui On Holdings, Panasonic Corp and Sumitomo Realty & Development have all subscribed for lesser amounts.
Originally started in the city of Dalian in northern China’s Liaoning province, DLSP now has business park developments in Suzhou, Tianjin, Wuhan, and Beijing, in addition to its initial Dalian location.
Besides the two real estate IPOs, eight other firms kicked off listings this week in Hong Kong, as companies look to cash in on a recent five percent surge in the stock market.