Macau opportunity fund to develop 1.5m sq ft shed in China

Sniper Capital-managed London-listed Macau Property Opportunities Fund is to begin development on its first investment in mainland China, an industrial warehouse scheme.

Macau-focused opportunity real estate fund manager, Sniper Capital, is to develop its first asset in mainland China and its first in the logistics real estate sector.

Using capital from its London-listed opportunity fund, Macau Property Opportunities Fund, the firm is to begin redeveloping a 205,000 square foot warehouse into a 1.5 million square foot logistics centre, to be completed by the end of 2011.

The APAC Logistics Centre is planned to cater for the needs of third-party logistics providers and end-users keen to tap into increased commerce stemming from the construction of the Hong Kong-Zhuhau-Macau bridge, a keenly-anticipated transport link between the western and eastern parts of China’s Pearl River Delta. The bridge is expected to cost $11 billion to construct and to complete by 2016.

Sniper raised $105 million for the Macau-focused fund via a public listing on London’s junior AIM market in 2006. The fund, which has since been moved to London’s senior stock exchange, has traditionally been used to invest in residential and small commercial schemes on the former Portuguese gaming colony. There is currently $30 million left for future investments.

According to the firm, the warehousing project was bought for $11 million in August 2008 and should require $34 million in debt financing to develop.

The firm told PERE: “We expect substantial upside in view of the Hong Kong-Zhuhai-Macau bridge, growing demand for logistics warehousing and exposure to RMB appreciation.”