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China Vanke mulls US$1b property management IPO

Hong Kong

CHINA Vanke Co, the country's largest developer by market capitalisation, is considering a Hong Kong listing of its property management business, according to people with knowledge of the matter.

The Shenzhen-based company has discussed with potential advisers a share sale that could raise as much as US$1 billion, one of the people said. The offering could happen next year, said the people, who asked not to be identified because the information is private.

Vanke would join other Chinese developers such as Country Garden Holdings Co in spinning off their management units, which are less prone to government policy changes and economic cycles.

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Country Garden Services Holdings Co was listed by introduction last year, while China Aoyuan Group Ltd's services arm raised US$94 million in a Hong Kong initial public offering last month.

Deliberations are at early stage, and details including the fundraising size and timeline could change, according to the people. A representative for China Vanke didn't respond to requests for comment, while a representative for the property management unit said they have no current plans for a listing.

Property management and related services were China Vanke's second-largest revenue generator after property sale. The business contributed 9.8 billion yuan (S$1.97 billion), equivalent to about 3.3 per cent of the developer's total revenue last year, according to its annual report.

MSCI China Real Estate Index has risen 32 per cent this year as the nation's property market shows signs of a recovery, with home sales surging in March. China Vanke's Hong Kong-listed shares have climbed 26 per cent since the beginning of the year. The stock fell 3.2 per cent as at 2:56 pm on Thursday. BLOOMBERG