China Investment Corporation was selling a $1.9bn parcel of shares in the industrial property powerhouse Goodman Group on Tuesday night in a deal handled by investment bank Citi.
CIC was offloading 2.6 per cent, or 50.4 million shares, in an auction with a floor price of $37.55 – which was underwritten – and up to $37.60.
It equates to a discount of about 1.4 per cent to 1.5 per cent to its last close.
Shares closed at $38.12 on Tuesday, up from around $33 in September.
It comes after brokers were said to be testing any appetite on Tuesday night for a potential selldown, as earlier reported by DataRoom.
CIC has had an 8.9 per cent interest in the industrial property powerhouse, and Goodman Group shares have rallied in recent months.
Its entire stake was valued by the market at $6.4bn.
DataRoom flagged in September a selldown by CIC could be on the cards.
The last time that CIC sold shares in Goodman was in 2012, when it offloaded a 6.9 per cent stake worth $518m, crystallising a profit on its initial and much larger investment, which was made in the midst of the global financial crisis.
It comes at a time when China’s economy is slowing, and it potentially faces high tariffs in the US with Donald Trump elected president in November.
The Wall Street Journal recently reported that low consumption has become a headwind to China’s growth because property investment, once a major component of demand, has collapsed.
Goodman under chief executive Greg Goodman has historically been close to investment bank Macquarie Capital, but the last time CIC embarked on a block trade out of Goodman it called on the services of Goldman Sachs.
At the time, CIC’s policy was to obtain bids from three separate brokers over the price.
Other global banks with strong relationships in Asia, including Citi, are Morgan Stanley and JPMorgan.
Goodman’s share price has been on the rise in the past year, as investors sought exposure to data centres.
They remain in strong demand because of the need for artificial intelligence and cloud storage.
For the year to June, Goodman generated a $98.9m loss despite a lift in operating earnings.
Assets under management fell and the value of its property was down almost 3 per cent to $78.7bn.
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