CK Asset explores sale of $3b landmark Shanghai project

Shanghai skyline. Photo: Ralf Leineweber/Unsplash

CK Asset Holdings Ltd., one of Hong Kong’s biggest developers, is considering selling its stake in a large project in Shanghai, according to people familiar with the matter.

The landmark project – Upper West Shanghai in the city’s northwestern Putuo district — was billed as one of the largest mixed-used developments in the financial hub when construction started in 2011. A sale could value the entire project at about 20 billion yuan ($2.9 billion), the people said, asking not to be identified because the discussions are private. CK Asset has a 60% interest.

A transaction of that size would rank among the biggest commercial property deals in China. CK Asset itself holds the title for the second-largest deal in the country after it offloaded a  half-stake in the Century Link project in Shanghai’s Pudong district for 20 billion yuan in 2016, according to Real Capital Analytics. China Overseas Land & Investment Ltd.’s 31-billion-yuan purchase of Citic Ltd.’s property assets in 2016 as part of a government-backed restructuring holds the record.

CK Asset “frequently receives offer proposals but these don’t necessarily mean the company will accept and sell the projects,” said Wendy Tong Barnes, chief corporate affairs officer.

CK Hutchison Holdings Ltd., the Hong Kong-based conglomerate founded by billionaire Li Ka-shing that has a stake in CK Asset, has sold a string of real estate assets in mainland China in recent years, reaping profits from a surge in land prices and property values. Its retreat is in contrast to foreign firms from Brookfield Asset Management Inc. to Blackstone Group LP, which have stepped up their China exposure to diversify risk in their global portfolios.

CK Asset’s land bank in mainland China decreased by 23% between 2016 and 2018, while the firm’s overseas reserves remained unchanged. Its land bank in Hong Kong was down by 33%, according to annual reports.

CK Asset has meanwhile been chasing real estate deals in Europe. It bought UBS Group AG’s headquarters in London for $1.3 billion last year, and has been in preliminary talks to buy a stake in a luxury housing project in the city, people familiar with that situation said in November.

The remaining 40% of Upper West Shanghai is held by minority investors represented by Zhoushan-based Herun Group Co. Representatives from Herun didn’t immediately respond to a request for comment.

Upper West Shanghai houses residential units, offices, retail space and a hotel in a total floor area of 1.2 million square meters (13 million square feet). The project, in a less developed part of the city that the government wants to transform into another central business district, also includes plans for a skyscraper that isn’t yet completed.

Bloomberg

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.