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HK property share sales boom amid China curbs
ADDITIONAL property offers have flourished in Hong Kong, as Chinese developers facing domestic funding curbs rush to sell shares offshore.
Real estate offers excluding IPOs have raised US$3.1 billion this year, up 40 per cent from the same period of 2018, according to data compiled by Bloomberg. With about two weeks to go, the annual tally is heading for a four-year high.
China has introduced tough restrictions on fund raising by developers, forcing them to reduce debt, as the government seeks to rein in home prices. Regulators allowed only one real estate firm to sell additional shares in the onshore market this year: Shanghai Lingang Holdings Corp raised US$694 million last month to develop a high-tech industrial park.
With developers turning to Hong Kong for funds, the property sector has become the top contributor to the city's follow-on sales. Real estate stocks account for a quarter of the value of Hong Kong additional offerings this year, data compiled by Bloomberg show.
Recent property offers have met with strong investor demand, as large developers are expected to post robust sales growth this year. Shares of Midea Real Estate Holding Ltd jumped 4.9 per cent on Wednesday after raising about US$99 million in a placement the night before. Similarly, China Vanke Co's stock climbed for three straight days in Hong Kong after the company announced a US$995 million placement on March 27. BLOOMBERG