The performance of the Hui Xian Real Estate Investment Trust (REIT), controlled by Asia's richest man Li Ka-shing, will be closely watched by the market as it will be used to gauge the future of yuan IPOs in Hong Kong.

But the initial public offering has failed to spark huge interest among investors, after it was priced at the lowest end of a range between 5.24-5.58 yuan per share, raising 10.48 billion yuan ($1.61 billion).

China has been using Hong Kong -- a semi-autonomous Chinese territory -- as a test bed to internationalise the yuan, but the lukewarm response could signal that the financial centre may struggle to become a yuan trading hub.

Some observers expected the landmark offering to help set the yuan on the path to becoming a global currency, challenging the US dollar's dominance.

Units of Hui Xian fell 1.3 percent to 5.17 yuan on Thursday in so-called grey market trading ahead of their official debut, Dow Jones Newswires reported, citing trading firm PhillipMart.

Some analysts however remain optimistic, saying the appetite for yuan IPOs should be judged over a longer period.

"This is the first one, it will be a long way to go and Hong Kong needs more yuan IPOs. This is just the beginning," said Jonas Kan, the head of Hong Kong research at Daiwa Securities Capital Markets.

"It is an important milestone. This is quite a major development in Hong Kong because the market capitalisation is quite big," he told AFP, saying the offer will pave the way for investors to tap into China's hot property market.

The REIT is tied to the Oriental Plaza, a sprawling 100,000 square metre (1.1 million square foot) complex in Beijing's prime Wangfujing Street which includes a mall that commands some of the city's highest rental rates.

The IPO, which opened for sale on April 11, saw the trust sell two billion units, or 40 percent of the property firm.

The institutional tranche of the offering was fully subscribed, according to a source, while a 20 percent share of the offering set aside for retail investors was oversubscribed two and a half times.

Analysts said the IPO may have failed to generate the kind of excitement garnered by previous Hong Kong share offerings because the offering's low liquidity would be unattractive to many local investors looking to buy the shares and sell them for a quick return.

China is also reportedly in talks with Hong Kong rival Singapore to set the city-state up as a trading hub for the Chinese currency. Singapore is the second largest foreign exchange trading centre in Asia after Japan.

Hui Xian's listing plan comes a month after Li raised $5.5 billion from a Singapore listing of Hutchison Port Holdings Trust, which controls deepwater ports in China and Hong Kong.

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