China Vanke Prepares for $2 Billion Property Management IPO

China Vanke Co., the country’s largest developer by market value, is working with an adviser to prepare for a listing of its property management business in Hong Kong that could raise about $2 billion, according to people with knowledge of the matter.

The Shenzhen-based company is holding talks with several other banks for the offering, which could take place as soon as the end of this year, the people said. The use of technology in its real estate management could help boost the unit’s valuation, the people said, asking not to be identified as the information is private.

Shares in Vanke rose as much as 2.1% in Hong Kong to an almost one-week high on Thursday.

Vanke would join other Chinese developers such as China Resources Land Ltd. and Country Garden Holdings Co. in spinning off their management units, which are less vulnerable to government policy changes and economic cycles. Bloomberg News in 2019 reported Vanke’s plans, which was later delayed by the Covid-19 pandemic.

Shares in China Resources Mixc Lifestyle Services Ltd., which raised $1.8 billion in its Hong Kong IPO, have more than doubled since its December debut. Country Garden Services Holdings Co. has risen over 700% since its listing in 2018.

Deliberations are ongoing and details including size and timeline could still change, according to the people. Representatives for China Vanke and the property management unit didn’t immediately respond to requests for comment.

Property management and related services were China Vanke’s second-largest revenue generator after property sales. The business contributed 15.4 billion yuan ($2.4 billion), equivalent to about 3.7% of the developer’s total revenue in 2020, according to its annual report.

©2021 Bloomberg L.P.

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