China Vanke prepares for US$2b property management IPO

Beijing

CHINA Vanke, the country's largest developer by market value, is working with an adviser to prepare for a listing of its property management business in Hong Kong that could raise about US$2 billion, sources said.

The Shenzhen-based company is holding talks with several other banks for the offering, which could take place as soon as the end of this year, they said.

The use of technology in its real estate management could help boost the unit's valuation, they added, asking not to be identified as the information is private.

Shares in Vanke rose as much as 2.1 per cent in Hong Kong to an almost one-week high on Thursday.

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

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Shares in China Resources Mixc Lifestyle Services have more than doubled since its December debut. Country Garden Services Holdings has risen over 700 per cent since its listing in 2018.

Deliberations are ongoing and details including size and timeline could still change, the sources said.

Property management and related services were China Vanke's second-largest revenue generator after property sales. The business contributed 15.4 billion yuan (S$3.16 billion), equivalent to about 3.7 per cent of the developer's total revenue in 2020, its annual report showed. BLOOMBERG