Fosun Property, the Shanghai-based real estate investment and management platform of the Chinese conglomerate Fosun Group, has acquired a majority stake in the London-based private equity real estate firm Resolution Property in a bid to expand its overseas property holdings.
In its first ever asset management platform buy outside Asia, Fosun Property has become the majority owner in Resolution Property Investment Management (RPIM), a joint venture company created between the firm and Resolution Property. The remaining stake will be retained by Resolution Property’s partners. The acquisition price was not disclosed.
Terming it as a strategic investment, Alex Gong, executive president, overseas business and equity investment at Fosun Property Holdings, told PERE in an exclusive interview that RPIM will act as Fosun’s main real estate investment manager to invest in value-add real estate opportunities across Europe.
“It is a great pleasure to partner with Resolution Property to establish Fosun’s European investment and management platform. It marks a significant step in Fosun’s global approach. After acquiring the Japanese IDERA Capital in 2014, we have focused on finding experienced and professional overseas investment and management platforms as our priority,” he said. “In the future, Resolution Property will be the exclusive platform for value-add investment in Europe for Fosun Property, utilizing Fosun’s insurance capital and building up global investment capability.”
Fosun, via the newly-created platform, will also provide cornerstone funding for all subsequent real estate funds launched by Resolution Property. The pan-European private equity real estate firm is understood to be plotting the launch of its fifth vehicle, Resolution Real Estate Fund V, towards the later part of the year.
“RPIM will continue Resolution Property’s well-established strategy of opportunity-driven investment in assets with strong value-add potential, both in the UK and Continental European office and retail markets. With Fosun’s backing, RPIM will be targeting investments in large assets and portfolios. It will also be actively looking to export Resolution Property’s UK model of office development for the creative and digital sector to new European cites,” said Fosun in an official statement.
Fosun’s first brush with European property was in October 2013 when it acquired the Lloyds Chambers in London reportedly for £64.5 million (€90.95 million; $100.69 million) Around the same time, it also forayed into the US property with the $725 million acquisition of One Chase Manhattan Plaza in what was the largest purchases of a US property by a Chinese investor at the time.
Explaining Fosun’s overseas ambitions, Gong said: “As a China-originated real estate player, we have a strong motive to be fully international. We are going to focus on single assets or portfolio opportunities – direct investments made from Shanghai – but also on a parallel, take an organic and non-organic approach to acquire local capabilities since real estate is such a local business.”
The conglomerate’s acquisition of IDERA, a boutique Japanese property investment firm, in May last year, exemplifies this strategy. Fosun also set up an office in Zurich last year, and Gong added that Singapore, India, and Mexico are among the other countries the firm will be targeting next for opening a local office.
For the next few months, Fosun would continue to focus on Europe, especially the office and retail sectors, due to attractive valuations and a low interest rate environment. The US and Australia markets are slated to be next on its radar.
“We will also be shifting focus to the US and Australia – two large markets where we don’t have institutional capabilities yet,” said Gong.
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