HONG KONG, Oct 15 (Reuters) Excellence Group, a property developer based in the Chinese city of Shenzhen, plans a Hong Kong IPO in the second quarter of 2008 to raise roughly $1.5 billion, joining a spate of mainland developers tapping capital markets to fund growth, sources familiar with the deal said.
The company has hired investment banks Morgan Stanley and UBS to underwrite its share sale, the sources said. Both banks declined to comment.
China's property sector is surging despite government efforts to stave off a speculative bubble by tightening access to bank financing. Bigger companies in the fragmented sector have instead been looking to share sales in order to raise money.
Thus far this year, Chinese real estate firms have sold US$9.1 billion worth of equity in Hong Kong, more than triple the haul at the same point in 2006, according to Dealogic data.
Developer China Aoyuan Property Group Ltd <3883.HK> saw its shares end 31 percent higher in their debut trading day last week after an initial public offering raised US$467 million.
Beijing-based SOHO China Ltd <0410.HK> made a more muted trading debut last week after raising US$1.65 billion, closing 15 percent higher on its first day.
Economic growth forecast by China's central bank at 11.6 percent for this year has fuelled investor interest in the country's real estate sector, with the markets in top-tier cities Beijing, Shanghai, Shenzhen and Guangzhou especially robust.
Shenzhen borders Hong Kong.
REUTERS DKS DS1437