ARA in record $2.9bn Shanghai property buy

ARA Asset Management, the Singapore-listed real estate fund manager, has sealed this year’s biggest single-asset property transaction in Asia-Pacific with the acquisition of Century Link in Shanghai. The agreed value of the asset is 20 billion yuan ($2.9 billion; €2.7 billion), according to a public statement issued by ARA.

The firm, backed by the Hong Kong business tycoon Li Ka-shing, has acquired the mixed-use property from two subsidiary companies owned by Li, namely Cheung Kong Property Holdings and the Li Ka Shing (Overseas) Foundation. In a Hong Kong stock exchange filing, Cheung Kong Property Holdings said it expects to record an unaudited gain of around HK$6.22 billion ($800 million; €730 million) from the sale.

Century Link is a newly-completed commercial property in Shanghai, comprising two office towers and a six-story retail podium. ARA Asset Management has acquired the asset via the ARA Harmony VI fund. The firm said the single-asset vehicle, with an initial term of 10 years, is anchored by an undisclosed insurer. A minority stake in the fund is also held by the Peninsula Investment Partners LP and the Peninsula Co-Investment Holdings, two funds managed by ARA Asset Management.

“Century Link is a landmark deal, given its prime location, quality and scale. It is expected to make significant contributions to the local community, providing prime Grade A office accommodation to demanding corporate tenants and a much-needed large-scale, mid-high retail offering in Pudong. We are also encouraged by our investors’ confidence in ARA’s investment and asset management capabilities, especially for very large-scale commercial properties in the region,” commented Ng Beng Tiong, chief executive officer for ARA Private Funds.

The ARA Harmony fund series have typically invested in large single assets. The S$384 million ($275 million; €253 million) ARA Harmony Fund V was formed in 2015 to own and redevelop the Park Mall commercial property in Singapore while the Fund III, also set up in 2015, was established to acquire a portfolio of retail malls in Malaysia.