Warburg Pincus ramps up in China

Warburg Pincus has reportedly bought a 25 percent stake in Shanghai ZK Real Estate Development as it increases exposure to the emerging market.

Warburg Pincus is taking a minority stake in ZK Real Estate by buying newly issued shares, Chinese media have reported.

The firm has also agreed to provide at least $30 million (€23 million) for housing projects by ZK Real Estate, according to the Shanghai Daily, which quotes Philip Mintz, managing director of Warburg Pincus Asia.

The deal would build on Warburg Pincus’ first significant move into China announced at the end of last year. In December it reportedly bought a 20 percent stake in budget hotel operator 7 Days for its first global real estate fund, which closed on $1.2 billion in October.

Real estate firms have been buying stakes in developers as a way of entering emerging markets in Asia and eastern Europe.

Recent deals in China include the purchase of a $35 million stake in Sino Ocean Real Estate Development by the private equity arm of Asia-focused Standard Chartered bank.

Morgan Stanley Real Estate took a stake in Russian developer RosEuroDevelopment in July 2006 for its first investment in the country.

In Asia, Warburg Pincus’ real estate investment professionals are based in Hong Kong, Beijing, Mumbai and Tokyo.