Li Ka-shing’s first Hong Kong yuan-denominated real estate investment trust (REIT) was officially launched on 10 April.
Relying on demand from investors seeking to benefit from growth in China’s property market, the Hui Xian REIT can potentially raise as much as 11.16 billion yuan (S$2.1 billion), with the sale of 2 billion units at a price of between 5.58 yuan and 5.24 yuan. The REIT will be the first ever yuan-denominated equity initial public offering (IPO) outside mainland China.
A successful listing of the Hui Xian REIT may persuade other firms to launch similar products to plug into the bulging yuan deposits in Hong Kong. The IPO may also attract investors seeking higher returns on their yuan deposits, while enabling them to bet on the appreciation of the Chinese currency.
“The future is for the renminbi to become a global currency and this is definitely a milestone for Hong Kong,” said a banker involved in the Hui Xian deal.
“Other issuers make their own decisions based on market conditions. If this one becomes successful, then other people will follow.”
The REIT will be handled by Hui Xian Asset Management Ltd, a joint venture (JV) between Singapore’s ARA Asset Management, Citic Securities and Cheung Kong (Holdings) Ltd.
Hui Xian owns the Oriental Plaza complex in Beijing, which comprises a shopping centre, a high-end hotel, two serviced apartment buildings and eight office towers. The REIT is scheduled to start marketing on 29 April under the code “87001”.