Chinese developer Excellence Real Estate Group Ltd plans to raise up to $1 billion from a Hong Kong initial public offering, according to a term sheet obtained by Reuters on Friday, as it joins the ranks of real estate firms queuing to cash in on the country's property boom.

The Shenzhen-based property developer, which focuses on commercial properties and mid- to-high-end residential projects, is selling 3 billion shares, or 25 percent of its enlarged share capital, at an indicative range of HK$2.10 to HK$2.60 per share, the term sheet said.

However, some investors have cast a wary eye on property listings in the Hong Kong aftermarket, given the half-dozen or more that are expected to hit the market.

Glorious Property fell 20 percent on its debut this month, while China South City's opening day was worse, with a decline of 23 percent.

Chinese property IPOs are not very attractive to investors, as there are plenty of choices in the market and their valuations are not expensive now, said Y.K. Chan, strategist at Phillip Capital Management (HK) Ltd.

But investment bankers in the region also say that if a company can prove it's different from the others, public or private, then investors will seize the offering.

A formal marketing roadshow for Excellence started on Friday, and the retail portion of its Hong Kong offering will run from Oct 21 to Oct 27, with final pricing on Oct 27 and a trading debut set for Nov 3, according to a term sheet.

It is an appropriate time for the firm to list now as it is seeking more funds for acquiring additional land use rights and further expansion, a company spokeswoman said.

According to analysts at the banks handling the IPO, Excellence's offering price represents a multiple of about 8 to 10 times forecast 2010 earnings.

By comparison, SOHO China trades at 6.4 times 2010 forecast earnings, while KWG Property trades at 12 times forecast 2010 earnings.

By June this year, Excellence had completed development of commercial and residential property with a total gross floor area (GFA) of about 1.9 million square meters. UBS estimated the firm had a landbank of 11.6 million square meters and 14 property projects under development or held for future development.

UBS expected rising land property prices would trigger government policy to cool the property sector, but given Excellence has about 60 percent of commercial exposure in terms of operating profit, it could potentially buffer the impact.

Chinese property prices in 70 cities rose 2.8 percent in September from a year earlier, versus a 2 percent rise in August.

Morgan Stanley, UBS and ICBC International are joint bookrunners and joint lead managers of the deal.

Several Chinese property firms that tried to list late last year postponed offerings while the financial markets recovered. When Asia's stock markets took off earlier this year, companies rushed to the IPO market, raising tens of billions of dollars from investors eager to get back into Chinese stock offerings.

(US$1=HK$7.8)

(Additional reporting by Michael Flaherty)

(Editing by Chris Lewis and Clarence Fernandez)

Investment China