(Bloomberg) ? American International Group Inc. and eight other investors will buy HK$4.45 billion ($572 million) of the shares in an initial public offering of the Hong Kong government?s first real estate investment trust next month.

American International, AMP Ltd. and the seven other investors will buy 18.8 percent of the 1.97 billion units Hong Kong is selling in what will be the world?s biggest first-time sale of a property trust, the government said at a press briefing yesterday. Hong Kong may raise as much as HK$21.36 billion.

Hong Kong property prices have rebounded since 2003 after a six-year slump that led to a projected HK$5.5 billion deficit at the Housing Authority. Hong Kong?s economic growth is forecast to more than double to 7.5 percent this year, and the government-run agency is betting rising rental income will boost profit and attract investors.

?We can sell the assets at a premium to their asset value,? said Leung Chin-man, Hong Kong?s permanent secretary for housing, planning and lands at the press conference. ?Most of the world?s REITs are sold at a discount when they list.?

Hong Kong retail property prices have gained an average 15 percent between December 2003 and October this year with some of the shops located in prime locations surging 50 percent, according to research data from Hong Kong-listed Midland Realty (Holdings) Ltd. Residential property prices have gained 28 percent during the period, Midland said.

American International Assurance Co. (Bermuda) Ltd., AMP Capital Investors Ltd., Capital Research and Management Co., Fidelity Investments Management (Hong Kong) Ltd., First State Investments (Hong Kong) Ltd., Henderson Global Investors Ltd., ING Clarion Real Estate Securities L.P., Prudential Asset Management (HK) Ltd. and Stichting Pensioenfonds PGGM are investing in the REIT, the government said. CapitaLand Ltd., which owns Singapore?s biggest property fund, earlier said it will invest $180 million for about 5.9 percent of the units of the Hong Kong REIT at the final offer price. CapitaLand cannot sell the shares for one year after sale, while the nine investors are locked in for six months, the government said.

The investment trust, which includes 180 properties ? made up of 950,000 square meters of retail space for shops and 79,000 parking spaces in low-cost areas ? will help the government-run Housing Authority cut its deficit, which it projected in July will be HK$5.5 billion in March 2006.

The government is selling units in the property trust at between HK$10.51 and HK$10.83 each. Hong Kong retail investors, initially entitled to 10 percent of the offer, can buy the REITs at a 3 percent discount to the final price, which will be set on December 11.

The price range represents a 5.1 percent to 8.3 percent premium to the properties net asset value of HK$10 per unit, bankers involved in the sale said earlier this week. At the end of September, the total value of the properties on sale was HK$30.85 billion, according to the sale document.

A real estate investment trust, or REIT, is a company that buys and manages real estate, or loans backed by property, using money invested by its shareholders. Their dividend payments depend on rental income from a number of projects, allowing them to deliver steadier earnings than property developers.

Link Management Ltd., which manages the property trust, will begin trading on the Hong Kong stock exchange on Dec. 16. The company may sell an additional 216.7 million units depending on demand, the government said.

Dividend Yield

The dividend yield will be as much as 6.85 percent, the government said today. That?s higher than competitors in Singapore, including Fortune REIT, which has a 5.3 percent dividend yield.

HSBC Holdings Plc., Goldman Sachs Group Inc. and UBS AG are arranging the sale. JPMorgan Chase & Co. is the financial adviser of the Housing Authority. Officials at the banks declined to comment.