Li Ka-shing withdrawing from mainland property market
September 10, 2013 Leave a comment
Li Ka-shing withdrawing from mainland property market
Staff Reporter
2013-09-10
Hong Kong property tycoon Li Ka-shing has been selling his assets in mainland China, with Hutchison Whampoa and Cheung Kong Holdings recently announcing plans to sell off a large shopping mall in Guangzhou, the Shanghai-based National Business Daily reports. The two companies, both owned by Li, announced that they will sell their respective 50% stake in Metropolitan Plaza in Guangzhou’s Liwan district to an offshore company called GCREF Acquisitions 22, for HK$3 billion (US$390.7 million). The deal is scheduled to be finalized on Nov. 29.Insiders said that slow development, improper market positioning and a failure to attract customers were the main reasons for mall’s overall lackluster performance. For Li, who is known for “selling at high prices by buying at low prices,” it is the perfect time to sell as the property market in mainland China is at a turning point, an investment consultant said, adding that Li’s reduction of his asset holdings in China is aimed at shifting his funds into Europe.
The Metropolitan Plaza is a a three-storey-plus-basement complex with a floor area of 88,000 square meters. The mall was scheduled to open in mid-2007. However, after many twists and turns it did not open to the public until late last year.
There are other signs that Li is slowly withdrawing from the mainland real estate market, the paper said. On Aug. 21, it was reported that Cheung Kong Group planned to sell Shanghai Lujiazui Agricole OFC’s offices for more than 6 billion yuan (US$973 million).
Despite its leading position in Hong Kong, the conglomerate has fared relatively poorly in nearby Guangzhou. The Guangzhou International Toys & Gift Center, its first business investment in the city, opened in 2004 with a great number of shopping outlets. In its initial stage, 500 booths were snapped up in a single day. However, the business began to decline shortly after the center opened, subsequently leading to numerous store closures.
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