H&Q sells Chinese residential community

After nine years, H&Q Asia Pacific has exited a troubled residential investment in Shanghai.

Shanghai-based H&Q Asia Pacific has sold the Shanghai Links Executive Community, a luxury residential and executive development located in the Pudong district, to the government-owned Pudong Development Group for an undisclosed price.

In a statement, the firm acknowledged the project had numerous problems since H&Q’s initial investment in 1997.

“H&Q Asia Pacific and our investment partner, Deutsche Bank, had to fight a multi-jurisdictional legal battle and overcome deeply entrenched administrative obstacles in China in order to recover our investment from a web of fraud, misrepresentation and political manipulations,” said H&Q managing director Chih Wang in a press statement. “That we were able to successfully do so—recovering not only our original cost basis, but also a small return on our investment plus reimbursement of legal expenses—demonstrates that China’s legal, regulatory and investment climate has matured significantly and now is favorable to large-scale real estate development.”

The Shanghai Links Executive Community is a luxury residential development project, which also features a Jack Nicklaus signature golf course and is home to the Shanghai American School. The complex also has medical facilities and a retail component.

In 1997, H&Q and its investor group took a 40 percent position in the project for $50 million (€40 million). In 2000, the group sued its original partners for fraud.