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Li Ka Shing sold 10 billion yuan of property and commercial real estate foam or burst in two months

Li Ka Shing sold 10 billion yuan of property and commercial real estate foam or burst in two months

October 23, 2013

[China paint information] Li Ka Shing sold 10 billion yuan of property and commercial real estate in two months, and the foam of mainland property and commercial real estate is on the verge of bursting? The rent of office buildings in Shanghai's core business district fell for three consecutive quarters, and the rent of the first floor of high-quality shopping centers in Guangzhou fell for the first time in three years in the third quarter

with the property Oriental Huijing center of Hehuang in Shanghai targeting buyers, Li Ka Shing, the richest man of Chinese, sold off more than 10 billion yuan of mainland commercial properties in less than two months. Although this may be an option for Li Ka Shing's global layout, it also poured cold water on the mainland's booming commercial real estate boom

both shopping malls and office buildings

recently, Hutchison Whampoa announced that the Oriental Huijing center, which is 50% owned by Changjiang industry and Hutchison Whampoa, has targeted buyers, and the buyer drilling rig Group Co., Ltd. will acquire 6% of the equity of the project, while the prices of the other two offshore registered companies, mited and hyzlinvestme, will also increase, and mited will acquire the remaining 94% of the equity. The drilling rig group has been confirmed to be held by Everbright Holdings, but the real identity of the other buyer has not been officially announced. The project is priced at HK $8.95 billion

it is reported that the Oriental Huijing center is located at No. 333, Lujiazui (21.64, -0.63, -2.83%) ring road, Pudong New Area, Shanghai, facing the "Shanghai center" in the East. The total construction area of the project office building is about 88000 square meters. It is still under construction and is expected to be completed in 2014

on August 29, Li Ka Shing's companies, Changshi and Hehuang, sold 50% of the equity of Guangzhou Xicheng Duhui Plaza respectively, with a total transaction amount of HK $3.03 billion. These two transactions amounted to HK $11.98 billion, equivalent to nearly 10 billion yuan

the return of commercial real estate in the mainland is not optimistic

on the one hand, Li Ka Shing is selling commercial real estate in the mainland. On the other hand, commercial real estate in Shanghai, Guangzhou and other places are suffering the consequences of blowout growth

according to the Gaowei global report, the rent of office buildings in Shanghai's core business district in the third quarter has just ended three consecutive quarters of consolidation decline. The effective net rent of Grade A office buildings in the core business district calculated by the area of use is 412 yuan per square meter per month, Wu Guanghui, deputy general manager of COMAC (equivalent to 288 yuan per square meter per month), The rent increased by 1.7% month on month from the two steps of structural optimization of spring testing machine shared by Jinan testing machine factory Xinguang

in Guangzhou, the situation is even worse. According to the latest data of Savills, the stock of Grade A office buildings in Guangzhou reached 3.23 million square meters in the first three quarters of 2013, with a huge supply. In the retail real estate market, the first floor rent of high-quality shopping centers fell for the first time in three years in the third quarter, down 0.1 percentage points month on month, to 704.1 yuan per square meter per month

therefore, the return rate of Li Ka Shing's commercial property in the mainland is also lower than that of other investments. Hutchison Whampoa's 2012 annual report shows that since 2010, Hutchison Whampoa's rental income in the mainland has declined year by year. In 2012, the mainland rental income was HK $296million, accounting for 7.8% of Hutchison Whampoa's total rental income

other data show that in addition, Hutchison Whampoa's average return on net assets is more than 11%, and Cheung Kong Industrial's average return on net assets is closer to 15%. However, the return rate of Guangzhou Xicheng Duhui Plaza can only reach 7%, and the rental return of Lujiazui office building is only about 5%

in response to Li Ka Shing's repeated selling actions, some insiders even said that the mainland's commercial real estate foam was on the verge of bursting