Beijing North Star Co, a Hong Kong-listed property arm of the municipal government, plans to raise 3 billion yuan (US$362 million) from a first-time share sale in China's mainland as early as next month to fund projects for the 2008 Olympics.

　　The developer expects to get approval to offer 1.5 billion yuan-denominated shares on the Shanghai Stock Exchange this week, Guo Quan, an official at the company's secretariat, said in a phone interview. Regulators will review the plan today.

　　Beijing North Star will use the money for an Olympic Village media complex that will house reporters covering the games and a commercial development. Beijing plans 300 construction projects totaling 1.5 trillion yuan in the run-up to the games.

　　"We are likely to see more Beijing-based property developers seeking to list in China to raise funds for Olympics projects," said Zhou Feng, who manages the equivalent of US$242 million at Boshi Fund Management, including shares in China Vanke Co, the largest home developer in Shenzhen.

　　The Beijing government's investment plans include about 280 billion yuan of spending on stadiums, housing and shopping malls related to the Beijing Olympics Games, Ding Xiangyang, head of the city's Development and Reform Commission, said this month.

　　The Chinese government is clamping down on bank lending for property projects on concern that the industry may overheat, prompting more companies to turn to the capital markets.

　　Beijing Capital Land Ltd, another Hong Kong-listed city government unit, also plans to raise as much as 3 billion yuan from a first-time mainland share sale. The company, which sold US$120 million of stock in Hong Kong last year, aims to sell 1.2 billion yuan-denominated A shares to fund construction of residential and commercial buildings, it said in a statement last month.

　　Companies can raise money more cheaply by selling A shares. The benchmark Shanghai Composite Index trades at 43 times earnings, compared with 24 times for the H-share index. That means companies can raise more money by selling the same number of shares. Beijing North Star shares trade at 12 times earnings.

　　The 360,000-square-meter Olympic Village project will be sold or rented as apartments after the games, Beijing North Star said. It will also build a 180,000-square-meter office, shopping and entertainment complex at the Asian Games Village in Beijing. The two projects have a combined investment cost of 3.3 billion yuan, the company said last year.

　　Beijing North Star also won a contract to build a 5 billion yuan convention center, hotel and commercial complex for the Olympics, the company said in November. Proceeds of the A-share sale won't be used for this project, Guo said.

　　The developer's net income more than doubled in 2003 to 287 million yuan, from 130 million yuan a year earlier, on sales that jumped 32 percent, the company said on February 19.

　　The A-share fund-raising target is equal to 85 percent of the company's market capitalization of 3.3 billion Hong Kong dollars (US$426 million), based on Thursday's closing price. Beijing North Star has 707 million H shares outstanding in Hong Kong.

　　(Bloomberg News)