In general, China’s real estate sector may still be in doldrums, but there are pockets of growth recently, particularly in key cities such as Shanghai, where several investors are now starting to pour money.
Dutch pension asset manager APG Asset Management joins Canadian property firm Ivanhoe Cambridge in investing around $920 million in Shanghai-based Chongbang Holdings, according to a statement from the three companies.
The money will be used to fund several projects in Shanghai and other cities that Chongbang has earlier identified, including more than doubling the portfolio of its mixed-use development called Life Hubs.
“Chongbang sees enormous growth opportunities in the retail-anchored mixed-use sector in Shanghai and its neighboring cities, both in terms of development of new projects and enhancement of old ones, as the region steps up its urban regeneration programs,” said Henry Cheng, Chongbang CEO.
The investment represents APG’s strategy to expand its presence globally, particularly in urban areas with growth potentials, said Sachin Doshi, managing director and head of private real estate investments for Asia Pacific at APG.
APG’s investment in Chongbang is the firm’s second in China following a $650 million commitment to another Shanghai-based company, logistic developer e-Shang, in 2014, Doshi said.
“Rapid urbanization, growing disposable incomes and continued rebalancing towards domestic consumption are recurring themes in China and we believe Shanghai, more than any other city in the PRC will lead this consumption story,” said Doshin.
Singapore sovereign wealth fund, GIC, is an existing shareholder of Chongbang, a retail-anchored mixed use developer, owner and operator.
Photo credit: Bernd Thaller via Flickr