Vanke to list business projects separately
Updated: 2015-01-20 09:54
By Hu Yuanyuan(HK Edition)
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Vanke - one of Chinese mainland's largest property developers - plans to list its new business lines separately in the near future, as part of its latest efforts to adapt to the country's changing landscape in the residential sector.
The new business sectors include the group's commercial properties, resort projects and its community projects for senior citizens, the company's top management said over the weekend when attending the opening ceremony of Vanke's Songhua Lake Resort in Jilin province.
Shenzhen-based Vanke has invested about 2 billion yuan ($321.6 million) in building a ski resort close to Songhua Lake in Jilin city, and the total investment will reach 3 billion yuan, according to Ding Changfeng, senior vice-president of Vanke Co Ltd.
Meanwhile, Vanke will also seek opportunities to acquire smaller ski projects within three years, aiming to expand this section's business scale and get it listed in the near future, Ding said. So far, Vanke has opened two resort projects in Hainan province.
"The company will also integrate 25 shopping malls across the country and set up an independent commercial property company this year, probably at the end of the first quarter," he said.
Ding revealed that he had recently met a number of investment bankers in Hong Kong to discuss plans to float the commercial property unit. But the place for the potential listing has yet to be decided.
"Although the proportion of those new business sectors remains low at the moment, they are definitely to grow fast in the future. Capital value management will be Vanke's primary task," said Ding.
According to Lu Ming, a research manager with international real estate service provider Cushman & Wakefield, Vanke's business reshuffle is highly necessary to adapt to the changing landscape in China's residential market.
"You have to find new development opportunities when the room for the residential sector is much more limited than before. Getting listed will make the company's financing easier, especially for such a big developer," Lu said.
China's residential market has seen prices slipping since the beginning of last year, with declines in both property sales and real estate investment. This year remains tough for property developers, especially for those who have projects in smaller cities where supply has largely exceeded demand.
Most industry insiders agree that the residential sector's golden era has ended, and a number of developers have begun overhauling their operations.
Wang Jianlin, chairman of Wanda Group - another of the country's largest builders - said Wanda will strive to be service-oriented multinational company instead of a property developer.
The company has now repositioned itself to be a comprehensive consumption and entertainment service provider. By 2020, Wanda's service sector is expected to contribute more than 65 percent of the company's revenue and profit, while the contribution from properties will be lower than 35 percent, according to Wang.
"There will be more cross-sector cooperation between property developers and other industries in future," Lu said.
huyuanyuan@chinadaily.com.cn
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Vanke's commercial property unit is weighing an IPO, yet the place is still pending, according to Ding Changfeng, senior vice-president of Vanke Co Ltd. Brent Lewin / Bloomberg |
(HK Edition 01/20/2015 page9)