London-listed developer in China push

By Sundeep Tucker and Robin Kwong in Hong Kong

Published: March 2, 2008 22:09 | Last updated: March 2, 2008 22h09

Township Properties, a catalogue of London Chinese property developer is expected Monday to announce the Rmb2.5bn ($ 350m) for the acquisition of commercial land bank in the city of Guangzhou.

The company, which joined the objective of the market last August, plans to develop a financial center of the earth, Pearl River in the business district of New Town.

The Township Finance Centre complex should include a 244000 square meters of offices, shops, apartments and a five star hotel.

There has been a strong demand for commercial property in Guangzhou, where rents have risen by about 20 per cent in two years, according to analysts. The request stems from the establishment of the offices of multinational companies in the rapid growth of the southern Chinese city of Hong Kong and companies looking to move support staff to reduce costs.

According to Savills, the property adviser, the average monthly rent in the city of Guangzhou last year was $ 19 per square metre, always behind the $ 36 per sq m of commercial properties in Shanghai and far behind the 137 dollars per square meter commissioned by the first offices in Hong Kong's Central district.

Canton Properties, the acquisition is consistent with its strategy to own and develop projects alongside busy stations along the subway line in Guangzhou.

People familiar with the situation most recently said the acquisition of land is paid through a mixture of shares and cash in a transaction between related parties.

The project site for the Canton Finance Centre is 50 per cent owned by Wong Keng, Canton Properties' executive chairman.

It is understood that Knight Frank, the property surveyor, recently assessed the site to Rmb3bn. Township Properties is expected to launch a fund-raising to support the acquisition, with its senior officials meeting investors in Asia, the Middle East and Europe over the next three weeks.

The company is also organizing project to secure the debt to finance the development of the Township Finance Centre, which is expected to open in July 2011.

Township Properties shares have more than doubled since the announcement, valuing the company at about £ 400m ($ 794.7m).