CPIL Canton Prop

RNS Number:2043C
Canton Property Investment Limited
15 August 2007


   Canton Property Investment Limited ("Canton Properties" or the "Company")


                 AIM Admission of Guangzhou Property Developer


Hong Kong-based property development company, Canton Property Investment Limited
(Ticker: CPIL), will start trading on AIM on 16 August following a successful
US$ 55 million (approx. #27.1 m) placing of new and existing shares.

The Company, which is incorporated in the British Virgin Islands, will be one of
the first AIM companies developing commercial property projects in mainland
China and will provide a flexible platform for future acquisitions. Canton
Properties (Ticker: CPIL) will be admitted on AIM valued at US$ 368 million at
its placing price of 90 US cents per share (approximately 44.25p). Libertas
Capital is the financial adviser, nomad and broker to Canton Properties.


Chief Executive Charlie Lin said: "We are delighted to have received such strong
support from backers who understand the fundamentals of our business in China.
Now we are offering AIM investors the chance to benefit both from the mainland
Chinese commercial property boom and from its consumer spending boom".


Canton Properties is involved in the development, management and operation of
shopping malls on mainland China. It currently owns two key assets, both
situated in the heart of Guangzhou, China's wealthiest city in terms of GDP per
capita.


The first site, Comic City, is already well-established as a retail and
entertainment complex, while the second, the Mall of Canton, is still under
development and due for completion in early 2009. Both are located with
underground levels connected to stations on the City's expanding underground MTR
network. The Company is seeking a similar approach for future developments.


The funds raised will be used to complete the Mall of Canton, to pursue new
development opportunities, and for working capital purposes.


The placing of 61.1 million shares comprised 55 million new shares and 6.1
million existing shares was handled by Libertas Capital's Hong Kong subsidiary,
Libertas Capital Asia Ltd.

For further information contact:


Canton Property Investment Limited Dennis Yau                     +852 2219 9669
Libertas Capital London Stephen Pickup                          +44 20 7569 9650
Libertas Capital Asia Charles Li                                  +852 3525 9100
First City Financial Public Relations Allan Piper/Jiang Lei     +44 20 7242 2666



Background details follow:


AIM Admission Details


AIM symbol: CPIL

Gross funds raised for the Company:                                $49.5million
Placing price:                                                         US $0.90
Number of new shares placed:                                         55 million
Number of existing ordinary shares sold by founders:                6.1 million
Enlarged number of shares in issue:                               408.9 million
Percentage of enlarged share capital with placees:                       14.95%
Market capitalisation at placing price:                         US$ 368 million



Advisers:


Nominated Adviser:                   Libertas Capital Corporate Finance Limited
Financial Adviser                    Libertas Capital Asia Limited
Broker:                              Libertas Capital Securities Limited



Board of Directors:


Keng Wong                       Chairman

Charlie Chung Sing Lin          Chief Executive Officer

Dennis Wai Tak Yau              Chief Financial Officer

Garry Alides Willinge           Independent Non-Executive Director

Sir David William Brewer        Independent Non-Executive Director

Henry Hin Wing Lai              Independent Non-Executive Director

Mui Kwan Chan                   Non-Executive Director



Use of funds


   >   Completion of Mall of Canton (approximately US$40 million),

   >   Pursuit of new opportunities in the Guangzhou area (approximately 
       US$2 million)

   >   General working capital (approximately US$2 million).



Website:                    www.canton-properties.com




Background information:


Canton Property Investment Ltd was incorporated on 19 February 2007 to invest in
businesses which are involved in the development, management and operation of
shopping malls in China. The Company currently focuses on opportunities in
Guangzhou, China's wealthiest city in terms of GDP per capita, which are
considered by the Directors to have the potential to generate significant
capital appreciation and stable income returns. At Admission, the Company will
hold two property assets in the Beijing Road area, a premier shopping area in
the Yuexiu District in Guangzhou:

   >  Comic City: an operating, themed shopping mall with a gross floor area
      (GFA) of approximately 33,000 square meters (sq m) located at Gongyuanqian
      interchange metro station; and

   >  Mall of Canton: a shopping mall under construction with a proposed GFA of
      approximately 110,000 sq m located along Guangzhou's Beijing Road.

It is the Group's goal to become a leading commercial property developer in
China, initially specialising in property developments along the Guangzhou Metro
Network. Following the opening of Comic City by the Group in August 2006 a
memorandum of understanding was signed between the Group and Guangzhou Metro.
This memorandum of understanding outlines the Group's strategic partnership with
Guangzhou Metro for future property development opportunities.

The Company's objective is to generate returns for investors from capital
appreciation and to achieve an attractive yield through rental income. With the
extensive knowledge and experience of the Management in the PRC property
industry, the Group intends to achieve its objective by creating and maintaining
a diversified portfolio of properties at various stages of development. This
portfolio will include completed retail/commercial properties and projects
currently under construction in Guangzhou, in particular the Pearl River New
City, and other regions of China with high growth potential in the short to
medium term.



Key Strengths


The Company's management have many years of real estate expertise in China. This
is complemented by a network of experienced external consultants in
architecture, design, construction, HVAC systems and other relevant areas.

The Directors believe the principal competitive strengths of the Group are as
follows:

>  the initial portfolio combines a rental stream with strong potential for
   capital appreciation; Comic City and Mall of Canton are both located at prime
   commercial locations

>  the Group's status as strategic partner of the Guangzhou Metro o!ers
   strong potential development opportunities;

>  the Company will be one of the first PRC commercial real estate players
   listed on AIM and will have a #exible platform for future growth through
   acquisitions;

>  the Group offers exposure to Guangzhou, which is one of China's largest
   cities containing extensive investment opportunities; and


>  the Company has a strong management team with extensive commercial property 
   development experience, excellent governmental relationships and a proven 
   track record of acquiring assets with growth potential and developing
   them into successful, mixed-use properties. Chief Executive Charles Lin 
   Charlie Lin earlier in his career oversaw the development of two landmark 
   projects in Shanghai - the Grand Gateway and Plaza 66



The market

Since 2000, China's property market has experienced strong growth with
investment in real estate more than trebling between 2000 and 2005 from Renminbi
(RMB) 498 billion to RMB 1,590 billion. This strong demand has led to a
considerable increase in real estate values. In 2000 the average price of
commercial properties rose more than 150 % from RMB 3,260 per sq m to RMB 5,022.

The Pearl River Delta, which is principally located in Guangdong Province, is
considered by Knight Frank to be one of the country's three leading economic
regions alongside the Yangtze River Delta and the Bohai Rim Economic Circle. In
2005, Guangdong contributed approximately 31% of the country's exports whilst
having only 7% of the country's population Guangzhou is the capital of 
Guangdong. In 2005 Guangzhou was China's third largest city behind only Beijing 
and Shanghai in terms of total GDP. On account of its high level of 
urbanisation, mature property markets and extensive supply of quality buildings,
Guangzhou is also considered one of China's four first-tier cities in terms of 
property development.

Strong housing demand, an expanding service sector and a mature retail market
have stimulated investment in the property sector. The total floor area sold in
Guangzhou's primary market reached 12.7 million sq m in 2005, representing an
increase of 136 % from the level in 1999. The total floor area sold in the
primary market accounted for 25 % of Guangdong's total property sales in 2005.

According to the commercial property agents Knight Frank, the underground metro
development has been reshaping the landscape of Guangzhou's property market and
Guangzhou is one of only six cities in China with a metro network.

Development of metro lines has enhanced accessibility of previously
underdeveloped areas. The number of passengers using lines 1 and 2 in 2006
totalled 266 million. Lines 3 and 4 were launched in December 2005, lines 5 and
6 are under construction anticipated to be completed by 2008 and 2010
respectively.

The metro system is expected to play an increasingly important role in
intra-city transport in future. The municipal government intends to discourage
car ownership and promote optimal usage of the metro system.

The completion of Beijing Road Metro Station in 2010, adjacent to the Mall of
Canton, should further enhance the accessibility of Beijing Road.

Beijing Road in the Yuexiu District is one of the busiest shopping streets in
Guangzhou. The retail units on this road consequently have very high occupancy
rates of approximately 98 % with rental yields of around 6-8 %. Under the
Guangzhou Retail Network Development Plan, Beijing Road is to undergo a major
extension and revitalisation whilst preserving its traditional features. These
developments are expected to increase the street's attraction to local customers
as well as tourists.

With both of Canton Properties' existing properties being situated close to the
Beijing Road pedestrian zone and adjacent to an existing metro station or a
metro station under construction the Directors believe that these properties
will show strong potential for capital growth in the coming years.


Comic City

Comic City was opened in August 2006. With a GFA of approximately 33,000 sq m,
the property is situated by the People's Park, a city landmark, and acts as the
main entrance points to Guangzhou's Metro's Gongyuanqian interchange station.
Comic City is positioned as a leisure and shopping destination aimed at young
adults aged between 15 and 35. The existing tenants include food and beverage
outlets, digital entertainment retailers, telecommunication products suppliers
and fashion stores. The 3-storey underground shopping mall has nine direct
access points to the Gongyuanqian interchange metro station.

According to Guangzhou Metro's statistics, average daily people flow in
Gongyuanqian Station is approximately 440,000. The mall incorporates a car park
which contains approximately 200 parking spaces.


Mall of Canton

The Mall of Canton, which is under construction, will be positioned as a medium
to high-end shopping mall providing a mix of retailers, bars, restaurants and
entertainment facilities. With the opening targeted for early 2009, the Mall of
Canton will be an 11-storey building with eight levels above ground and three
basement levels (including parking) and a GFA of approximately 110,000 sq m.
International consultants have been engaged by the Group on the design and
mechanical engineering aspects of the development.


Property appraisal valuation

Knight Frank has carried out an independent property valuation, which attributes
an aggregate open market values to the Company's properties of RMB 3.268 billion
(approximately US$ 423.9 million).




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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