HONG KONG: Gateway Group, a real estate Hong Kong developer, is reviving a plan to offer the first publicly traded real estate investment trust made up solely of mainland China office buildings, people with direct knowledge of the plan said last week.

The trust may raise up to $500 million in a Hong Kong sale as early as the first half, said the three people, who declined to be identified before a company statement. The trust would initially pay investors from income from Beijing's Gateway Plaza, twin office towers whose multinational tenants include the German carmaker BMW.

Gateway Group is taking advantage of rising demand for top-grade office space as foreign companies expand and upgrade their Beijing offices after China opened its domestic banking market wider to foreign competition in December.

"There is an abundant supply of office buildings in Beijing, but not that many grade-A properties," said Jason Yang, a senior manager at the Beijing office of Colliers International, which provides commercial real estate services. "Many tenants in the central business district looking to expand or upgrade their office space are finding it difficult to do so."

Vacancy rates for grade-A office buildings fell in the fourth quarter last year to 12.9 percent, down 1.6 percentage points from the previous three months, according to a report by Jones Lang LaSalle. It is unclear what properties Gateway will pursue in the future to add to the real estate trust, and whether they will be in Beijing.

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Gateway Group, also known as Bestride Holdings, plans to use the trust to buy and develop property in China. Deutsche Bank and HSBC Holdings will arrange the initial public offering, the people said, with the German bank also serving as the trust's manager.

Jason Collins, a spokesman for Deutsche Bank in Singapore, and John Ryan, a spokesman in Hong Kong for HSBC, declined to comment. Chen Jian, a spokesman for Gateway Plaza, said he did not know about an initial public offering plan.

Gateway began investing on the mainland with hotels and other property developments in the southern province of Hunan.