Shimao joins Taiwan's Farglory to launch US$10 billion property fund

HONG KONG: Shimao Property Holdings and a Taiwanese company have launched a US$10 billion (RM32 billion) cross-strait fund to identify real estate opportunities in each other's markets.

Shimao chairman Hui Wing-mau and Taiwan-listed Farglory Group have this week set up Straits Construction Investment (SCI) to explore large-scale property investment on the mainland and Taiwan.

Hui said the initial budget would be about US$10 billion, adding that he would invite other enterprises to join in as stake holders.

"There are more than 10 enterprises from Hong Kong and Taiwan interested in joining the company at this stage," he said, after announcing that Shimao's underlying net profit jumped 150% to 2.77 billion yuan (RM1.3 billion) last year.

Hui said he hoped to announce more details about SCI as early as next month.

The formation of SCI came as Farglory group chairman Chao Teng-hsiung flew to Fujian province's Fuzhou and Xiamen for a fact-finding tour using Hui's private jet between April 10 and 12.

It was believed that the first property investment would be in Xiamen's Pingtan Island, the closest mainland county to Taiwan.

Shimao said turnover jumped 137% to 17.03 billion yuan last year because of strong property sales and higher prices.

Net profit, including revaluation gains on investment properties and one-off gains, increased 317% to 3.51 billion yuan.

A final dividend of 23 HK cents per share was proposed.

Hui also said Shimao was interested in building a theme park in Dalian but did not disclose any further details.

Jason Hui Sai-tan, a vice-chairman and executive director of Shimao, said the firm aimed to sell 30 billion yuan worth of properties this year and hoped for eight billion yuan in contract sales for the first four months. "We are confident in achieving the sales target," he said. – South China Morning Post