The reason was not immediately clear, but the pullout underscores the difficulty little-known Chinese companies face raising capital offshore, as Chinese regulators restrict capital outflows, including "irrational" outbound investments in sectors such as property.

Reuters reported in December the buyer consortium is seeking to borrow as much as 90 percent to fund the deal through mezzanine financing and a senior loan.

Under the original deal announced in November, Beijing-based China Energy Reserve and Chemicals Group Properties was to own 55 percent of C.H.M.T. Peaceful Development, an investment vehicle that in turn would own "The Center". Various Hong Kong-based investors were expected to own the remaining 45 percent in C.H.M.T. Peaceful Development. With China Energy Reserve pulling out from the deal, Chinese developer Shimao Property Chairman Hui Wing Mau will now take up a 20 percent stake in C.H.M.T. Peaceful Development, one of the people said. The rest of China Energy Reserve's 55 percent stake will go to other Hong Kong-based investors, including Hong Kong's Kingston Financial Group Chief Executive Officer Chu Yuet Wah, the person added.

A banking source who saw the deal said lenders must consider policy risk. Chinese companies who invest in offshore property are breaching regulatory guidelines, and real estate is not a main business of China Energy Reserve. One of the shareholders of C.H.M.T. Peaceful Development, Lo Man Tuen, said China Energy Reserve "has cut the stake", without elaborating. He added that rest of the buyers have sufficient financial ability to finance the deal. The people declined to be identified as the matter was not public. Shimao declined to comment. Officials at China Energy Reserve could not immediately be reached for a comment. CK Asset Holdings and Kingston Financial did not immediately respond to Reuters request for comment.

Hong Kong tycoon Li's CK Asset Holdings said in November it was selling the 73-story office tower to C.H.M.T. Peaceful Development Asia Property. It was the world's biggest single property sale, which would bring in a HK$14.5 billion gain.

(Reporting by Clare Jim and Yan Jiang of LPC; editing by Larry King)

By Clare Jim and Yan Jiang