Kailong Real Estate Investment, a Hong Kong-based property investment company, has raised its first renminbi fund with enough firepower to buy RMB400 million ($60 million) of assets in China.
The Kailong REI Commercial Real Estate Fund will focus on buying and improving stabilised commercial property in China. The fund's investment focus lies in major markets such as Shanghai, Beijing, Guangzhou, Shenzhen and other major second-tier cities. the improvement side, Kailong will be working with its strategic partner, Sundart International Holdings, which is a Chinese property fit-out specialist.
Chief executive Hei Ming Cheng said in a statement, “With our track record and experience of investing in China, the fund was pursued by investors and recorded enthusiastic subscriptions.” He added that he believed the vehicle would bring “handsome returns” to its investors. Kailong Real Estate Investment is part of Kailong Hong Kong, whose shareholders include Secured Capital Japan and Cargill.
While renminbi-denominated real estate funds are uncommon, Kailong is not the only GP to have raised such a vehicle. Banyan Tree Holdings, the Singapore-listed hospitality development and fund management business, held a first closing for its first renminbi-denominated fund in September on RMB953 million for the Banyan Tree China Hospitality Fund, a vehicle which aims to make investments in Chinese companies that will undertake hospitality projects to be branded with the Banyan Tree name.