CK Asset Mulling $3 Billion China Real Estate Sale, Sources Say

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-use 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 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 on the Chinese mainland in recent years, reaping profits from a surge in land prices and property values.

CK Asset’s land bank on the Chinese mainland 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.

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.

Ref: Property Report