InfraRed eyes year-end wrap for maiden China fund

The Asia and Europe-focused firm has generated an 11% IRR from the 10 divestments made from the fund, and is expecting to sell the remaining two assets within this year.  

InfraRed Capital Partners is expecting to liquidate its $707 million maiden China real estate fund by the end of this year.

The Asia and Europe-focused firm has signed the sale and purchase agreement to sell one of the two last remaining assets in the InfraRed NF China Real Estate Fund I – a shopping centre in Beijing. Project Wangfujing, spread over 4,169,61 square feet, is being sold to a Beijing-based developer at an asset value of 2.2 billion yuan ($320 million; €290 million). The transaction is expected to close end of next month, according to a company statement.

The firm is also understood to be exploring options to sell a logistics warehouse in Dalian, its last remaining asset in the vehicle.

InfraRed Capital Partners and its joint venture partner Nan Fung Group, the Hong Kong-based conglomerate raised approximately $707 million for the vehicle in 2007. The firm is understood to have generated an IRR of 11 percent from the 10 investments it has exited so far, at a 1.5x equity multiple.

One of the key divestments made from the fund was the EC Mall in Beijing, which was sold to a joint venture between the National Pension Service of Korea and The Carlyle Group for 2.5 billion yuan in late 2014.

Meanwhile, the $360 million InfraRed NF China Real Estate Fund II, launched with a strategy to be invested in value-add and mezzanine deals, is currently being deployed. So far, 80 percent of the fund’s capital has been invested in seven deals in total. The most recent deal from the fund was a $28 million investment in China Mini Storage, a technology-led self-storage operator in China, announced earlier this week.