Deutsche Bank’s RREEF has made an entry into China’s burgeoning real estate industry.
RREEF has co-invested in a $US225 million mass residential project in Zhuhai, China. RREEF, together with one Macanese and two Chinese co-investors, plans to develop a $US225 million residential project on a 106,146 sqm parcel of land in the north-western Zhuhai district of New Xiangzhou.
The project, Zhongzhu Uptown, will offer apartments to primarily local middle class owner-occupiers. Approximately 2000 apartments and a small number of retail units will be built across around 20 towers on the site over the next three years.
RREEF’s head of Asia Pacific Kurt Roeloffs said China is a particularly attractive emerging real estate market given the pace of growth of its economy.
“As a key component of our broader Asia Pacific expansion strategy, RREEF has been actively looking for the right entry opportunity to China for some time, and we believe the Zhuhai project is a tremendously exciting first investment.
“We like the middle income residential sector where we believe there is strong demand and a structural shortage of supply; our project is located in one of China’s fastest growing economic centres; and we are developing the project with experienced local partners,” he added.
Roeloff said continued strong economic growth and positive structural changes, coupled with a relative shortage of all types of good quality real estate means the medium to long-term prospects for real estate market fundamentals in China remain very good.
“RREEF will continue to proactively identify further opportunities in key sectors and markets across China.” he added.
Zhuhai is a coastal city located in the Pearl River Delta region in southern China, near Macau. The PRD is one of the country’s fastest growing economic and manufacturing centres, with a population of around 50 million people.
RREEF was introduced to the project by Jones Lang LaSalle.
“We are honoured to have been involved in this landmark transaction in Zhuhai,” JLL’s Macau managing director Gregory Ku said.
“We are extremely happy to have been further appointed as the property management consultant for Zhongzhu Uptown, and will partner with the landlord to make the project a great success,” he added.
RREEF has teamed with three equity partners to develop the Zhongzhu Uptown project – New Genesis International, a Macanese real estate investor; Zhuhai Zhong Zhu Stock and sister company Zhuhai S.E.Z Xihai Group, a private Chinese conglomerate whose principal business is real estate development and management.
Genesis and Zhongzhu have already undertaken a successful residential project together in Zhuhai.
RREEF has a 50% interest in the project company, with New Genesis owning 25%, Zhongzhu 20%, and Xihai 5%. Zhongzhu has been appointed project manager, responsible for undertaking overall development and management of the project.
By Nelson Yap
