Others News
- Shimao Property to spin off hotels for IPO
Date: 20-Nov-2007 Sources: (Xinhua Online)
SHIMAO Property Holdings Ltd. plans to spin off its fast-expanding hotel business and list it separately in Hong Kong by 2010.
Shimao Property would also spend at least 5 billion yuan (US$673 million) in the next three years to boost the number of hotels to 20 from three now, the firm's chairman Xu Rongmao said yesterday.
'This is a very promising business in China, with revenue coming not only from rents, but also from asset appreciation,' Xu said.
'We expect to see explosive profit growth in this sector in the next one or two years.'
Xu has built a real estate empire over the past 18 years on the back of the country's booming property sector.
Shimao Property said earlier this year that it planned to transfer nearly US$1 billion in commercial property to a Shanghai-listed affiliate, Shanghai Shimao Co., in a land-for-shares swap to focus on developing homes and hotels.
Xu said the transaction was expected to be completed early next year, potentially making Shanghai Shimao China's biggest listed commercial property developer.
The deal would also give Shimao Property an alternative funding channel through Shanghai Shimao's access to the mainland equity and debt markets, Standard & Poor's Ratings Services has said.
Shimao Property currently operated three hotels in Shanghai and has started construction of a fourth, with plans also to build a theme park nearby to attract visitors, Xu said.
Xu said government measures to cool the real estate sector would benefit big players such as Shimao, which has a large land bank and a low debt ratio.
Other big players in China's property sector include China Vanke Co. and China Merchants Property Development Co.
Xu also saw huge potential in China's smaller, second-tier cities, where Shimao owns many real estate projects.
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