ING Real Estate has announced that it is setting up a joint venture with local developer Gemdale Corporation to build a residential property in Foshan, a city on the Pearl River Delta outside of Hong Kong.
The Dutch firm is investing $40 million (€28 million) in the joint venture for a 49 percent stake in the project. It is the second project ING has undertaken with the Chinese developer.
“We believe that this joint venture with Gemdale has high-growth potential and will enable us to take advantage of the fast-growing market in Guangdong province from which Gemdale originates,” Richard van den Berg, China head for ING Real Estate Investment Management, said in a statement.
The residential development, which will comprise approximately 110,000 square meters, will be targeted at the domestic market in Foshan, a prefecture-level city located in the prosperous Guangdong province approximately 100 kilometers from Hong Kong and Macau.
ING closed its Real Estate China Opportunity Fund I late last year on $350 million. The fund will focus on mid-range residential developments in primary and secondary cities in China, largely in the form of joint ventures with local operating partners like Gemdale.
ING tapped institutional investors from Europe, Australia, the Middle East, Europe and the US for commitments, as well as raising capital from high net worth individuals via its ING Private Banking arm.
ING first entered China in 1996 and has worked with other local developers like Shanghai Forte Land, for a project in Shangahi, and Raycom International for two housing projects in Changsha, the capital city of Hunan Province.