Land company seeks overseas partners
By Sun Ming (China Daily)
Updated: 2004-04-02 09:18

Real estate developer Beijing Capital Land Ltd is seeking overseas partners at various levels to become more internationalized after landing on the Hong Kong capital market.

The partnership is not just about capital and investment, it varies from project management, marketing and brand promotion, engineering design to property rental and leasing, said Tang Jun, president of Beijing Capital Land, a leading real estate developer in the Chinese capital.

The company is already co-operating with a number of top-class overseas real estate developers, architecture firms, investment groups and commercial companies on many projects in Beijing, said Tang.

Its closest partnership so far is with Singapore's GIC Real Estate Pte Ltd, one of its shareholders, which is working with the company on two high-class residential development projects in Beijing's Hepingli and Yuyuantan areas. GIC controls a 50 per cent interest and rights in the first project and 45 per cent in the later.

"If the first try proves successful, our two companies may join hands to develop more new projects," said Tang, adding that the co-operation is more likely to be in residential development.

He also said that foreign companies are encouraged to take part in its new projects through various means and foreign intermediaries are also welcome to provide services.

Beijing Capital Land, the real estate arm of the State-owned Beijing Capital Group, has undertaken 19 real estate projects in Beijing, including commercial buildings, hotels and residential properties, with a total construction area of 3.25 million square metres, company sources said.

It was listed on Hong Kong's main board in June, floating 564 million H shares. Now it is preparing for a 1.2 billion A-share offering back in the mainland market, which is expected to raise 3 billion yuan (US$362.3 million) in proceeds for the company and further enhance its financial strength.

"But we do not want to be stereotyped as a rich landlord," said Tang.

The H-share listing not only brings the company needed funds for development, but also puts it on the international market, where investors demand more transparency in operations, more advanced management and solid growth in profits.

"We still have a lot of catching up to do with international standards," said Tang. "Co-operating with the leading companies in the world will help us narrow the gap at a faster pace."

While foreign companies can introduce more expertise in risk management, cost management, liquidity enhancement and brand promotion, rich local resources the Beijing company now enjoys will also encourage foreign partners to further explore the local market.

Beijing Capital Land has already inked a rental agreement with Japan's Ito Yokado, Asia's largest chain retailer, on the use of a commercial building in Xizhimen for 20 years.

It also authorized the InterContinental Hotel Group, a global hotel chain, to manage a hotel facility in the Beijing International Finance Centre, which is being built in downtown Beijing.

"We still have many other projects that have contracted foreign companies and architectural firms," said Tang." Many were done through public bidding."

He said that if policy allows it, the company would also seek business expansion overseas.

"We aim to be the best overseas-listed real estate company in China in five years and one of the best in Asia in 10 years," Tang said.

Presently, due to restrictions on the convertibility of Renminbi in capital accounts, overseas investment by domestic real estate companies is still prohibited.

But as more overseas companies move in, domestic companies should try to expand overseas in the future, said Tang.