NEW YORK/HONG KONG - Chinese real estate company IFM Investments Ltd priced its initial public offering at the bottom of a lowered range, an underwriter said on Wednesday.

China's real estate market has benefited from strong economic growth and improved access to credit, but some say the boom might not last.

The company, which has a franchise agreement to sell real estate under the Century 21 brand in China, sold 12.5 million shares for $7 each, raising about $87.4 million.

Earlier on Wednesday it cut the size of its IPO to 12.5 million shares, which it hoped to price between $7 and $8. It had originally planned to sell 16.65 million American Depositary Shares for between $8.75 and $10.75 a piece.

A TOUGH MARKET

Chinese residential property prices rose strongly last year, sparking fears of an asset bubble. In December, urban property prices rose 7.8 percent from a year earlier, the fastest pace in 2009.

Now many fear government actions will cause the market to slow.

Premier Wen Jiabao, the Cabinet and other top officials have voiced concerns over the red-hot property market of the past month, and the Central Bank in January raised reserve requirements for banks for the first time since a December 2008 cut to try and prevent any burst in asset bubbles.

IFM said it is in a quiet period and declined to comment.

The company, which was co-founded by brothers-in-law Donald Zhang and Harry Lu, has seen sharp increases in net revenue and income. It reported net revenue of 443.7 million yuan ($65 million) for the nine months ended September 30, up 112.4 percent from a year earlier. Net income was 88.3 million yuan, compared with a loss of 99.3 million a year earlier.

IFM is heavily exposed to the Chinese residential real estate market. It has offices in 34 major cities and has about 4.7 million property listings. It sells mortgage management and franchise services, but in the first three quarters of 2009, IFM's company-owned brokerage offices accounted for more than 90 percent of its revenue.

It said in a regulatory filing with the U.S. Securities and Exchange Commission it expects to use net proceeds of about $83.6 million to open more offices, upgrade its systems, and for general corporate purposes.

Funds affiliated with the private equity arm of Goldman Sachs and GL Asia Mauritius Cayman Ltd are each selling a portion of their shares. After the IPO they will retain a combined 39.5 percent stake in the company.

IFM is expected to debut on the New York Stock Exchange under the symbol CTC on Thursday.

The underwriters for the IPO were led by Goldman Sachs and Morgan Stanley. They have the option to purchase an additional 1.9 million shares.

(Additional reporting by Samuel Shen in Shanghai; Editing by Gary Hill and Bernard Orr)

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