The battle pits Guangzhou Investment, the Guangdong provincial capital's largest property developer, against Cheung Kong (Holdings), the flagship company of Hong Kong's richest man, Li Ka-shing. Together the two initial public offerings could raise as much as HK$3.4 billion.

Guangzhou Investment plans to raise up to HK$1.6 billion by selling shares in the revenue streams of four mainland properties. It's offering 583 million units in a trust dubbed GZI REIT that will be priced to yield not less than 7 percent, a rich payout meant to compensate for the perceived higher risk of investing in mainland real estate.

The company plans to buy between 30 percent and 50 percent of the REIT for its own account, a stake typical of REITs in more developed markets such as Singapore, according to a market source. Guangzhou Investment begins its roadshow next Thursday, with pricing set for December 15 and trading slated to begin December 21.

Cheung Kong is looking to raise as much as HK$1.9 billion by offering shares in the revenue streams of seven Hong Kong buildings. The REIT, dubbed Prosperity, will go to market with an indicative price range of HK$2 to HK$2.16 per unit, yielding a much lower 5.31 percent to 5.73 percent, according to people familiar with the deal.

Retail orders will be accepted beginning early next week with pricing scheduled for Thursday. Trading begins on December 16.

Fund managers are attracted to GZI because of China's long-running economic boom. "There's the growing consumerism of Guangzhou with the people there seeing a rise in their standards of living," said Andy Mantel, managing director of Pacific Sun Investment Management.

When combined with the higher yield, that might make this seem like a one-horse race. Yet fund managers said GZI's yield might still not be sweet enough to overcome investor doubts about the wisdom of investing in mainland securities, especially in a product where many buyers are looking for predictable yield, not the possibility of quick capital gains.

"Investors may expect an even higher yield to compensate," said Phillips Securities director Louis Wong.

REIT investors, since they are buying the rental income stream, are most concerned with whether a property can maintain high occupancy rates over the long haul. Though volatility is no stranger to Hong Kong's property market, Guangzhou has a history of seeing asset prices soar only to plunge just as precipitiously when returns fail to materialize, fund mangers said.

Such doubts, and the greater transparency and stronger market-making mechanisims on offer in Hong Kong, offset a good part of the fatter yield Guangzhou plans to offer. "Over the course of the coming year there will be less uncertainty and doubt" here than on the mainland, Wong said.

Regardless of which deal proves most attractive to investors, both will get a boost from - and have been timed to coincide with - the Housing Authority's Link REIT, which rose 15 percent on its debut last Friday and has climbed another 2 percent since then.

Citigroup, HSBC and DBS are arranging the sale for GZI while Cheung Kong has hired JPMorgan and Merrill Lynch.