Hang Lung Properties Ltd., the Hong Kong-based company investing more than $8.5 billion building malls in mainland China, bought land in Wuhan for 3.3 billion yuan ($529 million) for a mixed-used development.
The company plans to invest 12 billion yuan building a shopping center, office towers and apartments with as much as 460,000 square meters (4.95 million square feet) of floor area, according to a statement yesterday.
“We are delighted to have successfully acquired this prime site in the city center of Wuhan at fair and reasonable commercial terms,” Chairman Ronnie Chan said in the statement. He called Wuhan, the capital of Hubei province, “the largest and most important city in central China.”
Chan is betting on rising consumption by China’s expanding middle class to fuel demand for high-end shopping malls. Hang Lung hasn’t purchased land in Hong Kong, the world’s most expensive place to buy a home, in more than a decade and has sold apartments and commercial properties in the city to help fund expansion elsewhere in China.
Hang Lung last month reported that 2012 profit excluding revaluation gains and deferred taxes almost doubled to HK$6.18 billion ($797 million). That beat the HK$4.79 billion average of 14 analysts’ estimates compiled by Bloomberg.
The company bought the 82,637-square-meter site in the Qiaokou district from the Wuhan Land Resources and Planning Bureau, a government agency, according to a Hong Kong stock exchange filing yesterday. The company paid 1.1 billion yuan on Jan. 29 and must pay the balance within 90 days of entering a development and compensation agreement.
Hang Lung announced the purchase after Hong Kong’s stock market closed yesterday. The shares gained 1.7 percent to HK$30.05. They have declined 2.4 percent this year, as the benchmark Hang Seng Index has climbed 2.3 percent.
Hang Lung Group Ltd., the developer’s parent, rose 1.2 percent to HK$47.55 in Hong Kong yesterday.