Century 21 China Plans $150 Million IPO

HONG KONG (Reuters) – Property agent Century 21 China Real Estate, partly owned by Goldman Sachs (GS.N), aims to raise US$150 million in an initial public share offering on the New York Stock Exchange this month, sources familiar with the deal told Reuters on Wednesday.

Century 21 China, already a household brand in the mainland China property market, planned to start a road show next week, aiming to list by the end of January, said the sources, who declined to be identified as they were not authorised to speak to the media.

“China’s property market is surging, so prospects for the company look good,” said a fund manager briefed on the IPO plan.

Two top Wall Street banks Morgan Stanley (MS.N) and Goldman Sachs have been hired as joint bookrunners.

Goldman Sachs bought a minority stake in Century 21 China in December 2005, according to the real estate company’s website (www.century21cn.com).

About a sixth of the nearly 10 trillion yuan ($1.5 trillion) in new lending by Chinese banks in 2009 flowed into the property sector, according to official data.

Concerned that an asset bubble could lead to social and economic instability, Beijing has vowed to combat overly fast price increases, although its moves to date, such as a less generous property tax break, have been relatively mild.

Policy impact on the red-hot property market had so far been limited, analysts said.

Century 21 Real Estate LLC first started its property business in the United States and entered the China market in March 2000, according to the company’s website.

After nearly a decade of business in mainland China, Century 21 China has become one of the largest real estate agents in the country, covering 31 regions and with 1,300 franchise offices.

Century 21 China said total real estate trading volume reach 80 billion yuan (US$11.72 billion) in 2007.

The company said it aimed to open 60 regional operations across China with more than 4,000 franchisees and 30,000 brokers, without giving a timeframe.

With many fresh graduates unable to afford high property prices in cities like Beijing and Shanghai, renting rather than purchasing is a growing trend among young Chinese in major cities. (US$1=HK$7.75) (US$1=6.827 Yuan)

By Kennix Chim
(Editing by George Chen and Chris Lewis)