LimeTree Capital, the Hong Kong-based private equity real estate fund manager, has raised $86 million from five investors for its China Car Parks Investment Fund, according to an SEC filing. The fund, which is LimeTree’s first country-specific fund and is targeting $325 million of equity, was launched late last year, and the firm indicated in the filing that it hopes the fundraising will not last longer than a year altogether. Mercury Capital Advisors is acting as the fund’s placement agent.
LimeTree launched the fund in order to take advantage of a severe shortage of parking spaces in China’s cities. Although car ownership is growing at more than 1.1 million new car sales per month, China as a whole has about five times fewer parking spaces than most Western countries, according to the LimeTree.
Shortages in China’s large cities are even more pronounced. According to estimates by China Resources Capital, the financial services arm of Chinese state-owned conglomerate China Resources, last year most Tier I and Tier II cities in China had parking space shortages of 400,000 to 700,000. In Beijing, the number was as high as 2 million fewer parking spaces than needed.
“Current government policy is now directed to solving each [city’s] parking problems,” the LimeTree website stated. “We believe parking rates will rise significantly over the next few years. The firm will look to differentiate itself by building a “unique service orientated parking brand in China,” it added.
Although a unique alternative property type, car parks in China have drawn some significant attention this year. In February, CR Capital and Dutch pension administrator Algemene Pensioen Groep formed a $265 million fund focused solely on building “a scaled and diversified portfolio of car park assets in city center locations in China.”
LimeTree Capital currently manages $568 million in equity across two funds, Emerging Beachfront Land Investment Funds I and II, which focus on land development across the Asia-Pacific. The firm most recently closed Fund II on $340.5 million – below its $500 million target – in 2009, according to PERE’s Research and Analytics division.
Neither LimeTree nor Mercury responded to requests for comment by press time.
PS: Don’t miss the July issue of PERE for a global look at alternatives including a take on Asia, where first-mover advantage is critical.