CHINA Vanke Co., the country’s largest residential property developer, said yesterday it was in talks with global investors, including funds and real estate peers, to sell a strategic stake as the company seeks to expand overseas and tap offshore capital markets.

    The stake sale could be accomplished by issuing new shares or via the purchase of shares from the secondary market, Vanke chairman Wang Shi told reporters at the company’s Hong Kong-listing ceremony yesterday.

    Vanke converted its B shares in Shenzhen into H shares and listed in Hong Kong by way of introduction, without raising any new capital.

    Shares of the Shenzhen-based firm opened at HK$13.66 (US$1.76 ) and closed down 2.78 percent at HK$13.28, compared with the last closing price of HK$12.41 on the B-share market in Shenzhen before they were removed from trading a week ago.

    Vanke, which kept its A-share listing on the Shenzhen Stock Exchange, has built mass-market apartments in more than 50 cities on the mainland. It has also recently invested in projects in the United States, Hong Kong and Singapore.

    “Vanke benefits from [an] H-share listing by potentially lowering funding costs, speeding up overseas investments and having a broader base of investors,” said Johnson Hu, an analyst at CIMB Securities.

    Speaking at the ceremony, Wang also said it is necessary for the mainland property market to correct now and it may take two to four years for such a correction.

    “I am worried that if the market doesn’t correct, the bubble will burst like we saw in the case of Japan. That would be trouble, so a correction is necessary. It may take two to four years for the market to become more healthy,” Wang said.

    While the best of times for China’s housing market may have ended, it is nowhere near a crash, Yu Liang, China Vanke’s president, said recently.

    Home sales in China fell 10.2 percent to 1.97 trillion yuan (US$316 billion) in the first five months this year compared with the same period a year earlier, while construction starts slid 18.6 percent to 599.1 million square meters by floor area, according to official data. Average home prices in 70 cities also declined in May for the first time, month on month, in two years. (SD-Agencies)