Century Bridge eyes second China fund

The China-focused fund manager is pondering its second China-focused development fund after deploying 80 percent of the capital from its first.

Beijing-based private equity real estate firm Century Bridge Capital has invested $60 million of equity in two joint venture development projects near Shanghai and Hong Kong, bringing the firm’s $170 million maiden fund to 80 percent invested.

With this capital deployed, Century Bridge could begin raising a second fund as early as this year, PERE understands, though the details of any potential fund have not yet been set. The firm declined to comment on fundraising.

The two projects are located in Wuxi and Zhongshan, both considered lower tier cities, and are expected to total 2.6 million square feet once completed. Costing a total of $282 million, they are expected to supply approximately 2,500 residential units for middle-income tenants.

Century Bridge is teaming up with Chinese developers for each of the projects: Jingrui Holdings in Wuxi and Dongfu Real Estate Development in Zhongshan. It is the first time Century Bridge has teamed up with either of these developers or invested in either of these cities. The firm’s first investments were in Wuhan and Hangzhou.

“The growth strategy and investment philosophy of our partners on these two transactions is very much in line with that of Century Bridge,” said firm president Wei Deng. “Jingrui Holdings, apart from developing in Shanghai, has primarily focused on projects in Tier 2 and 3 cities, [while] Dongfu is a local developer with a long track record of developing projects solely within the city of Zhongshan.”

Century Bridge is expecting a 24- to 30-month investment horizon for both projects, Delatour said. The developers are expected to buy out Century Bridge’s stake once they have enough of the residential pre-sales completed.

“Like all the markets we target, [Wuxi and Zhongshan] also are experiencing increasing levels of affordability, with annual disposable income growth exceeding home price growth,” Century Bridge chief executive Tom Delatour noted. “In addition to benefiting from adjacent infrastructure and accessible amenities, the projects themselves are designed to meet the needs of middle-class buyers in these areas.”

Co-founded in 2006 by Delatour, Century Bridge closed its debut fund on $170 million in September. The fund’s 10 investors include the Church Pension Fund, Metropolitan Real Estate Equity Management, Merseyside Pension Fund, Quilvest and Deutsche Finance Group.