China's Country Garden Co, a leading privately owned rural property in China developer, is seeking to raise funds for its project operation and reserving land resources by listing in Hong Kong.

Based in Shunde, South China's Guangdong Province, Country Garden registered on April 3 with the Stock Exchange of Hong Kong to raise more than 10 billion yuan (US$1.29 billion) through an initial public offering (IPO) on April 20. The property developer announced that the IPO share price would be between HK$4.18 and HK$5.38.

Country Garden's IPO subscriptions are expected to become only second to that of the Hong Kong's Link Real Estate Investment Trust (The Link REIT), which was valued at US$2.8 billion in November 2005 in the history of H-share market in the real estate sector.

The offering of 2.4 billion H shares in the Hong Kong Stock Exchange accounts for 15 percent of the property developer's total shares, according to Country Garden's prospectus.

A man prepares a film show at a Country Garden community in Guangzhou, Guangdong Province, in this April 2005 file photo.
 
Country Garden earmarked 2.16 billion shares, or 90 percent of the shares on offer, to strategic investors. Henderson Land Development Company and New World Development Company plan to pay HK$1 billion each for share subscriptions of Country Garden. Honeybush, CITIC Pacific and Temasek Holdings are also likely to commit handsome money respectively for the institutional offer, Hong Kong-based Finet Group reported on Monday.

Lee Shau Kee, Chairman of Henderson Land Development Company, recommended Country Garden on March 20 and predicted that the property developer's IPO shares could rise more than 30 percent on its trading debut in Hong Kong later this month.

Sufficient land reserves

Established in 1997 in Shunde, Country Garden focuses on real estate development, construction, decoration, and property and hotel management in new districts and suburban areas of bigger cities as well as downtown centers of medium-sized cities.

According to its prospectus, Country Garden has a number of completed projects with a floor space of 648.76 million square meters, which could accommodate 150,000 people. It is currently developing projects with a total floor space of 482.14 million square meters. At present, the company has a reserved land area of more than 13.32 million square meters, which is believed to ensure its sustainable development.

Vanke Co, China's largest publicly traded developer, has a reserved land area of more than 10 million square meters, statistics in 2006 revealed.