Li Ka-shing withdrawing from mainland property market

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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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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