Deals

Greenland Group in $3.25bn hotel portfolio sale

China’s largest property developer has sold a stake in a hospitality portfolio to a Singapore-based investment manager who will help the firm expand its overseas real estate holdings via a joint venture.  

-

The Chinese state-owned property developer Greenland Group has agreed to set up a joint venture partnership with a subsidiary of the Singapore-based investment manager Glory Fund Management Group. As part of the partnership, the developer will sell a stake in a portfolio of hotel properties in China valued at RMB 21 billion (€2.91 billion; $3.25 billion) to Glory’s subsidiary, Amare Investment Management Group.

Greenland and Amare ultimately aim to list the 19 hospitality property portfolio as a Singapore real estate investment trust (REIT), which would make it the largest REIT issued by a Chinese real estate enterprise to date, according to a press statement. The hotels are located in Tier 1 and 2 cities in China, including Shanghai and Nanjing.

The JV will also look to do more deals and David Su, chairman of Amare, told the Business Times that the two firms are “scouting for properties and land in Singapore to build landmark and iconic properties and are exploring a couple of sites now.”

“We intend to set up a multi-billion dollar private equity funds and trust in Asia and establish a regional hub in Singapore to manage our investment activities for Asia,” he added.

No details have been released yet on the amount planned to be raised via the REIT, which is currently awaiting regulatory approval.

Greenland could also seek to inject some of its overseas hospitality holdings into the partnership going forward. The developer owns hotels in Los Angeles, Sydney and Frankfurt and is reportedly in the process of building properties in Australia valued more than $2 billion, including a five-star heritage hotel called Primus Hotel Sydney that opened in December last year.

“Working with a Singapore partner such as Amare, which is led by Mr. David Su, who has vast experience in the finance/fund management, real estate, consumer product and retail, as well as the hospitality and entertainment industries, will help us to accelerate our growth plans (in China and overseas),” Zhang Yu Liang, the chairman of Greenland Group, also told the Business Times.