Dutch pension manager APG Asset Management and Ivanhoé Cambridge, the real estate arm of Canada’s second-largest pension fund, La Caisse de dépôt et placement du Québec, have jointly acquired a significant interest in Chongbang, a Shanghai-based developer, owner and operator of retail-anchored mixed-use projects. The two firms have taken the interest via an approximately $920 million capital raising.
The bulk of the capital raising is understood to have come from the two firms, while some existing investors in Chongbang have also contributed some amount.
Chongbang was founded in 2003 by a group of Singaporean and Hong Kong investors, led by Henry Cheng, a former senior executive at Shui On Properties who now heads the management committee at Chongbang, and Stephen Wong, who is now the chairman of the Chongbang group. The firm owns and operates 4,606,953 square feet of retail and commercial space in Shanghai with another 4,488,550 square feet under development.
With this capital raising, the company is targeting development opportunities in core retail precincts in Shanghai.
“Chongbang exemplifies Ivanhoé Cambridge’s growth strategy of building strategic alliances with prominent real estate companies that are proven industry leaders,” said Rita-Rose Gagne, executive vice president, growth markets for the firm. “We are enthusiastic about teaming up with other experienced institutional shareholders to ensure Chongbang’s future success and continued growth. Chongbang’s team has an outstanding track record, long-term vision and solid execution when it comes to creating and managing mixed-use, retail-focused projects that are well-positioned to cater to the ever-changing consumer landscape and new technologies that are reshaping consumer preferences.”
“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 Sachin Doshi, managing director and head of private real estate investments, Asia-Pacific at APG. “We like Chongbang’s deep understanding of consumer preferences in their catchments and the strong lifestyle themed retail complexes they have built and operating successfully under the Life Hub brands.”
He said that the investment was consistent with APG’s strategy to “participate in city-specific platforms in key gateway urban centers around the world, in sectors with compelling long term fundamentals and through partnering with management teams with unparalleled execution capability in the local markets.”
APG’s most recent investment in China was in the logistics sector in May last year when it committed $650 million to e-Shang, also a Shanghai-based developer and operator.