EXCLUSIVE: Starcrest in $200m Beijing office exit

The Hong Kong-headquartered private equity real estate firm has made its fifth exit from China since the firm’s launch in 2010.  

Hong Kong-headquartered private equity real estate firm Starcrest Capital Partners has exited its investment in a commercial office building in Beijing for around $200 million.

PERE understands that the China-focused fund manager has sold selected floors in the Beijing HP Building, a Grade B property located in the city’s core business district. The sale is understood to have been structured as a floor-by-floor share sale to capture the demand for strata offices in the city.

The deal has generated an IRR of more than 34 percent for Starcrest.

“From a private real estate investment perspective, this continues to be an attractive situation that has come to fruition as a positive outcome for all,” said Elvin Lim, managing director of the firm.

“We acquired the HP Building to capitalize on strong owner-occupied demand for CBD office space for single to multiple floors with limited supply of strata offices in the Beijing CBD submarket. Having completed our business plan to enter into a sale and leaseback program, and stabilize the rental yield, we took the opportunity to sell the asset to investors seeking diversified and stable income.”

Starcrest had directly acquired selected floors of the property back in July 2013 for an undisclosed sum.

Since its inception in 2010, Starcrest has made investments in a total of nine properties across China, putting to work more than $300 million in equity. These include direct investments in office redevelopment projects, retail assets and joint venture residential projects.

Early last year, the firm acquired three office buildings in the Zhangjiang High-Tech Park in Shanghai for $90 million. PERE had reported at the time that the firm had acquired the properties from a domestic information technology company, with plans to refurbish them in order to attract high-quality tenants.

The firm has also been active selling assets and the sale of the HP Building is the fifth exit made by Starcrest over the last four years.

Starcrest was founded by: Elvin Lim, previously head of corporate finance for Asia at MGPA; Jeff Liu who earlier served as a managing director for China for Angelo Gordon; David Yeung, who spearheaded real estate investments at Goldman Sachs’ special situations group; and Leo Jia, former deputy chief executive officer of the Shanghai-headquartered property developer Super Ocean Group.