Hong Kong real estate tycoons flock to the Guangdong-based residential developer which stands out because of its quick asset turnover and affordable prices. 

Guangdong-based real estate developer Country Garden is currently pre-marketing what looks set to become the largest initial public offering in Hong Kong this year. At the talked-about deal size it would be more than three times China Agri-Industries’ $410 million offering that tops the 2007 list so far.

It will also be the largest IPO by a Mainland property company ever, exceeding Shui On Land’s $877 million deal (post-shoe) in September last year. Being only the second Chinese real estate company to seek a Hong Kong listing since then, Country Garden will be an interesting test of investor sentiment, coming as it does only days after China raised its benchmark interest rate for the third time in less than a year.

According to market sources, the company is looking to raise around $1.3 billion (HK$10.1 billion) by selling 15% of the company through joint bookrunners Morgan Stanley and UBS.  advertisement
 
The smaller-than-usual free-float – the required minimum is otherwise 25% - has been approved by the stock exchange on the basis that the large deal-size will make the stock liquid enough even with 85% of the company in the hands of the controlling shareholder. The exchange normally does not grant this kind of approval unless the deal size exceeds HK$10 billion.