Pacific Century Jumps on Beijing Property Talks: Hong Kong MoverBloomberg News
Pacific Century Premium Developments Ltd., the property unit of billionaire Richard Li’s PCCW Ltd., surged to an almost 10-year high after saying it is in advanced talks to sell an office, retail and residential complex in Beijing.
Pacific Century shares resumed trading today in Hong Kong and jumped 25 percent to HK$3.83 at the close, the highest since April 30, 2004. Shares of PCCW added 0.3 percent to HK$3.58.
The developer is negotiating the sale of Pacific Century Place in the Chinese capital with no binding agreement having been reached, the Hong Kong-based company said in a statement yesterday, without identifying the buyer. Pacific Century said in October it was approached by potential buyers for its stake in the development.
“The project may attract investors seeking stable returns as the developer has invested in renovation of the retail space to boost value,” Betty Wong, a Shanghai-based executive director of investment services for Colliers International, said in a phone interview today. “This is not the first time the project is on sale, so it shouldn’t be viewed as Li’s family changing its investment direction in China.”
New-home prices in Beijing have surged, with government data showing a 16 percent year-on-year gain in November, as China held off on introducing more nationwide policies to rein in the real estate market and opted instead for measures implemented by local authorities. By contrast, office rents in Beijing fell in the first three quarters of 2013, according to figures compiled by Knight Frank LLP, a property broker.
Li Ka-shing, Asia’s richest man, said in November his companies have slowed land purchases in mainland China after prices rose. Li Ka-shing is Richard Li’s father and the chairman of Cheung Kong Holdings Ltd., Hong Kong’s biggest developer.
ARA Asset Management Ltd., a real estate investment trust manager partly owned by Li Ka-shing, sold the Nanjing IFC building for 3 billion yuan ($497 million), China Business News reported on Dec. 31.
Beijing is the world’s most expensive city for office locations after London and Hong Kong, according to broker CBRE Group Inc. Office rents in the Finance Street area in the city’s west were $197.05 per square foot per year in December, it said.
Beijing and Shanghai will remain China’s top office investment locations in the next three-to-five years, Frank Chen, Shanghai-based head of China research at CBRE, said in an interview yesterday. Office rents in Beijing will rise about 2 percent to 5 percent every year because of a supply shortage, Chen said.
— With assistance by Kelvin Wong, and Bonnie Cao