Property | China Overseas buys Citic’s assets for USD4.8b

China Overseas Land & Investment Ltd. said it will buy the Chinese residential property assets held by Citic Ltd. for about 31 billion yuan (USD4.8 billion) as it expands its presence across the nation’s cities amid surging land prices.
China Overseas will sell 1.1 billion shares at HKD27.13 each to the Citic companies as part of the transaction, it said yesterday in a statement to the Hong Kong stock exchange. China Overseas closed 1.8 percent higher at HKD26.20 in Hong Kong, after earlier rising as much as 6.8 percent.
The property projects that China Overseas is acquiring span 25 Chinese cities including top-tier hubs such as Beijing, Shenzhen and Shanghai and smaller ones such as Foshan and Chengdu. Property prices in China’s largest centers have surged this past year amid the government’s moves to stimulate the real estate market, and regulators have pledged to dissolve a glut of unsold homes in lower-tier cities.
Edison Bian, a Hong Kong-based analyst at UOB Kay Hian Ltd., said the move is “justified” for China Overseas given its ample cash and the intensifying competition for land amid high prices. The 24 million square meters of land being acquired, equivalent to more than half of China Overseas’ existing land bank as of June 30, will be “highly beneficial” to the company’s future development, according to the statement. Bloomberg