The new Irish owners of London’s Battersea Power station are raising £260 million from institutions to build what promises to be the largest offices-to-shopping mall development firm in China.

China State Real Estate Opportunities (CREO), a subsidiary of Battersea Power station owners Treasury Holdings, told the London stock exchange today that it is to float on the AIM market by July 10 with a £420 million market value.

CREO is the brainchild of Treasury founders and co-owners Richard Barrett and Johnny Ronan, Irish financiers, who have spent the past four years building a pipeline of Chinese land development deals including a lucrative joint venture with Shanghai Industrial Investment Company, the real estate arm of the Shanghai government.

Work is already underway to build a new city centre at Hongqiao in Shanghai that Mr Barrett, who is also executive chairman of CREO, said will be "A cross between London's Broadgate Centre and Birmingham's Bullring all in one."

The new funds will be used to buy $3416.6 million of land and projects underway in China from CREO’s parent company.

CREO already has 36 staff in place in Shanghai and another six in Beijing all overseen by Robert Tinknell, who was hired in 2002 from Berkeley Group, London's largest house builder where he ran the commercial division, to build up a permanent base in China.

Mr Tinknell said he expects to double his Shanghai staff to 75 by Christmas, sticking with the policy of half local Chinese, half western employees from all over Europe.

Mr Tinknell, who confesses to being an expert now in karaoke singing and late night drinking-sessions after years of "relationship building" with local Chinese power brokers, said: "The Chinese government feels now we have completed our apprenticeship which is why we are treated differently. We are treated as a thoroughbred real estate development company, very far from the typical western company which just flies in and out."

CREO has strong ties with Hutchinson Whampoa, the telecoms-to-property conglomerate, with whom CREO's parent Treasury has a joint venture for property projects in Ireland.

The group also has ties with The Poly Group, the largest state-owned developer in China. Its chief executive He Ping is the son-in-law of Deng Xiaoping, former paramount leader of China.

The Irish-backed group also has good connections with Parkview, the Hong Kong based developer which last year sold Battersea Power Station for £400 million to Treasury's other AIM-listed subsidiary Real Estate Opportunities.

CREO is currently working on three projects in Shanghai, two mixed offices and retail projects and one office scheme, collectively valued at £463 million but in total the company reckons on a development pipeline covering over 50 million square feet.

The Shanghai site underway at Hongqiao covers 1.4 million square feet of shopping mall - larger even than the new scheme underway at London's White City - and 1.3 million square feet of offices. The site is expected to complete by December 2009 at a cost of £550 million covering both land acquisitions and construction fees, but CREO expects a yield of 12 per cent based on the average rate of growth in rental and property prices in China over the past five years.

The office scheme underway at Central Plaza on People's Square in Shanghai rises to 22 storeys including three bottom floors for shops, with tenants lined up including Boston Consulting and is currently valued at £97 million.

CREO is currently 56 per cent owned by Treasury, Mr Barrett and Mr Ronan's wholly owned private company, and 26 per cent owned by AIM-listed Real Estate Opportunities (REO).

After CREO's Aim-listing and fund-raiser it will be 60 per cent owned by institutions, 30 per cent by Treasury and 10 per cent by REO.

Teather & Greenwood, the London broker now part of Landsbanki, is handling CREO's flotation while Davy is the Irish placing agent.

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