Hong Kong tycoon Li Ka-shing is reported to be seeking buyers for a sprawling, partly completed residential and commercial project in the western Chinese city of Chongqing, with an asking price of RMB 20 billion ($3 billion), according to an account in state-backed online news outlet The Paper.
The one million square metre project in the Yangjiashan area of Nan’an district, southwest Chongqing, is 95 percent owned by Li’s CK Asset Holdings. The news report cites a person in the industry with knowledge of the matter.
If successful, the sale would mark the latest in a string of large-scale property disposals by the billionaire tycoon, after CK Asset Holdings sold Hong Kong’s most expensive office building last November. CK Asset did not respond to a request for comment from Mingtiandi by the time of publication.
CK Poised To Exit Chongqing Investment After a Decade
The full site, which spans 1.64 million square metres of land, was acquired in 2007 by Li’s Cheung Kong Property and Hutchison Whampoa, in partnership with local developer Chongqing Youngstar Industry, for RMB 2.45 billion (then $317 million). Since that acquisition, Cheung Kong and Hutchison have been reorganised, with the company now known as CK Asset taking over the property assets of the two Li-controlled companies. CK Asset now owns a 95 percent stake in the site, while the remainder is held by the Chongqing developer.
The partners were reported to be investing RMB 12 billion ($1.6 billion) to develop most of the parcel into a mid-to-high-end residential and commercial complex, called Regency Hills. The site is located about eight kilometres from the mega-city’s Jiefangbei downtown business district.
The section of the site being offered for sale covers 1.03 million square metres, with a plot ratio of 3.2, yielding a total gross floor area (GFA) of 3.35 million square metres. With a total reported price tag of RMB 20 billion, the sellers are asking for the equivalent of RMB 5,970 ($932) per square metre of GFA.
Around 840,000 square metres (roughly 82 percent) of the site remains undeveloped, and can generate a total GFA of 2.7 million square meters — comprising 2.41 million square metres for residential use and 290,000 square metres for commercial use.
The construction of the project commenced in 2012 and was delayed for four years, local media reported. The municipal government settled compensation claims to residents of a village included in the plot only in 2016, nine years after the parcel was sold.
Li Ka-shing Keeps Shedding Properties
In recent years, Li has moved to trim his property empire in Greater China while shifting his group’s focus to investments in Europe and emerging sectors. Last November, CK Asset sold the Hong Kong office skyscraper The Center to a consortium of mainland and local investors for HK$40.2 billion ($5.15 billion), marking Asia’s biggest sale of a single property in 2017.
The previous year, CK Asset’s precursor Cheung Kong Property sold off the Century Link commercial complex in Shanghai’s Pudong district to an ARA Asset Management fund backed by China Life for RMB 20 billion (then $2.96 billion). That sale came three years after Li’s Cheung Kong and Hutchison sold the Oriental Financial Center in Shanghai’s Lujiazui to China’s Bank of Communications for $1.15 billion.
CK Asset had a development land bank of about 124 million square feet (11.5 million square metres), of which 114 million square feet, or 92 percent, was located in mainland China as of June 2017. Only six million and four million square feet of the Hong Kong-based firms sites were located in its home city and overseas, respectively.
The group’s portfolio of investment properties totalled about 17 million square feet (1.6 million square metres), with 14 million square feet located in Hong Kong, two million in the mainland and one million overseas.