(Yicai Global) Jan. 22 -- Hutchison Whampoa Ltd. [HK:0013], a real estate company owned by Hong Kong's wealthiest son, Li Ka-shing, is seeking buyers for a large commercial and residential complex in Chongqing, a megacity in Southwest China, offering as much as CNY20 billion (USD3 billion).
The parcel is part of the Old City Reconstruction Project Hutchison Whampoa bought from the Chongqing government in 2007, media reported Jan. 20. Hutchison Whampoa acquired 1.6 million square meters of land for CNY2.45 billion at that time. The current land area on sale is 1 million square meters. The ground has thus increased more than tenfold in value in the interim.
The real estate will be used to build residential areas -- mainly mid- and high-grade high-rises -- as well as roads, shopping malls, schools, warehouses and other supporting facilities. The project's total planned investment is CNY12 billion. Originally slated to break ground in 2008, the development did not actually start up until 2012. Only a few residential areas have now been finished, and 840,000 square meters of land are still unbuilt in this developable building area of 2.7 billion square meters.
This is not the first asset project Li Ka-shing's business groups have sold since last year. Cheung Kong (Holdings) Ltd. [HK:1113], another Li Ka-shing real estate firm, sold two parcels on Hong Kong's pricey Peak Road in September for about HKD2 billion (USD250 million). Cheung Kong also announced in November it will transfer its entire stake in The Center -- Hong Kong's fourth-tallest skyscraper -- for HKD40 billion. The group also sold a shopping mall in Hong Kong for HKD2 billion in December. Li is exploiting the mainland's current mania for Hong Kong office blocks to leverage his retreat from the region's real estate and into less-volatile overseas investments, the South China Morning Post reported in August.