* Developer Vanke says plans "big moves in M&A and equity
* Says overseas investment in next 5 yrs won't exceed 10 pct
* Favours U.S. market over UK for now, thanks to strong
(Adds quotes from president, stock price, details)
By Clare Jim
HONG KONG, April 9 China Vanke Co Ltd
, the country's largest listed real estate developer,
is looking to invest in property firms held by state-owned
enterprises as Beijing gradually relaxes its hold on government
As part of the government's reform plans, Beijing has
promised to allow more private participation in state-owned
enterprises. Many of those state-owned enterprises have expanded
into property development in recent years, drawn by big profits.
In February, China's decision to sell a stake in a
subsidiary of state-controlled Sinopec Corp
, Asia's biggest oil refiner, signalled more
privatisation of its bloated state-owned sector will take place
"We see opportunities from the reform and opening, SOEs
selling their competitive business," Vanke president Yu Liang
told a real estate forum in Hong Kong on Wednesday.
"We will make some big moves in M&A and equity investment,"
he added, without providing details.
Vanke's comments come a month after it said net profit for
2013 was 15.12 billion yuan ($2.44 billion), in line with
forecasts, and warned property prices in some Chinese cities
The outlook for the sector has been hit in the past months
due to tighter credit on the mainland and a slowing economy.
Weaker home price data and reports that developers have cut
prices have also rattled investors.
Shares of Vanke, which is based in the southern Chinese boom
town of Shenzhen, were down more than 1 percent on Wednesday,
lagging a flat CSI300 index of the largest Shanghai
and Shenzhen A-share listings.
Vanke has also joined a host of Chinese developers in
venturing overseas a time when tighter liquidity and the default
of a real estate developer on the mainland last month are
fuelling worries over the outlook for China's property market.
Yu said Vanke's total overseas investment for the next five
years would not exceed 10 percent of the company's overall
investment over that period and it favoured the United States
over Britain for now.
"We look at places where first, Chinese children are willing
to go study, and second, Chinese are willing to do business.
There are more and more Chinese going to the U.S., not UK, so we
consider the U.S. first," he said.
"If in the end we find a suitable partner in the UK we will
consider investing there."
China is expected to see 20 percent growth per annum in
outbound real estate investment in the next decade, up from
$11.5 billion last year, property agent Savills has forecast.
In February, Vanke said it will team up with U.S. developers
RFR Holding and Hines on a residential tower in New York that
will target high-end customers, its second project in the United
States after it tied up with Tishman Speyer last year on a
project in San Francisco.
Vanke also has investments in Singapore and Hong Kong. Last
week, it bought a project for HK$860 million ($110.87 million)
in Hong Kong from Soundwill Holding through its
overseas unit, Vanke Property Overseas Ltd.
($1 = 6.1968 Chinese Yuan)
(Additional reporting by Yimou Lee; Writing by Anne Marie
Roantree; Editing by Miral Fahmy and Ryan Woo)