China-focused private equity firm CITIC Capital is in talks to acquire City Apartments, a residential development in Shanghai for RMB250 million ($37 million; €28 million), from Australian bank Macquarie Group, sources told Reuters.
Located in downtown Shanghai, City Apartments comprises a 26-story tower of 90 service apartments aimed at providing homes to the corporate, long-term rental accommodation sector. Macquarie acquired City Apartments in 2005.
Although talks are progressing, it is thought that disagreements over particular purchase conditions could still reportedly result in the deal discussions, which have been on-going for months, falling through.
The firm put the project up for sale at RMB26,000 per square metre in 2008. If the deal went through, CITIC would pay approximately RMB16,000 per square metre, the report said.
This February, Stanley Ching, managing director and head of CITIC’s property wing, said that the firm will acquire two office projects and develop a residential project in China.
The investments were made out of Capital China Real Estate Investment Fund II, which closed on $400 million this January.
CITIC and Macquarie declined to comment.