Developer shrugs off investor concerns on eve of share float
Shui On Land, the mainland developer seeking to float shares in Hong Kong, will spend up to four billion yuan to relocate existing residents at its project developments in Shanghai this year.
'Our capital expenditure [this year] is relatively high as we need to relocate residents at Shanghai's Taipingqiao project,' Vincent Lo Hong-sui, chairman of Shui On Land, said yesterday.
The Taipingqiao project is a huge mixed-use development with a gross floor area of more than one million square metres in the Luwan district, which includes the popular Xintindi commercial project.
Investors have raised concern about the rising relocation costs at the company's projects in Shanghai, Hangzhou, Chongqing and Wuhan, especially as they come in the wake of the central government imposing austerity measures on the real estate market nationwide.
'Relocation costs at the Taipingqiao project are a major risk,' said a spokesman for a US investment fund.
However, Mr Lo stressed that resettlement was not a concern for the company, as the offering had already received a good response from overseas investors with the international tranche of the share sale oversubscribed.