ASIA/UK - Grosvenor, the London-based group of international property investment, development and fund management businesses, has launched a $600m (€468.7m) China retail fund.
The Grosvenor Vega China Retail Fund, which completed its first round of fundraising from US and European investors last month, is looking to buy shopping centres in Beijing, Shanghai, Ghangzhou and Shenzhen and hopes to achieve returns of 18-20%.
"We see shopping malls as representing significant long-term investment potential because China's domestic consumption is expected to continue growing as the local economy expands, and consumers have few options when it comes to shopping malls," said Nicholas Loup, chief executive of Grosvenor Asia.
The fund is also considering investing in some of China's up and coming cities, like Chengdu, Chongqing, Nanjing and Tianjin and will specifically look to increase returns through asset repositioning, tenant re-mix, property refurbishment and by holding assets over the fund's life to gain capital appreciation.
Shane Dudley, who is senior fund manager in Shanghai and responsible for setting up and managing Grosvenor's China Retail Fund, said the firm is already in talks about the purchase of a retail property and hopes to complete the deal by the end of the year at the earliest.
Grosvenor opened its Shanghai office in 2005 as part of its strategy to develop its business in mainland China but retail is currently Grosvenor's secondary focus in Asia Pacific after the residential sector.
The fund division currently has 12 funds under management with a total assets value of £3.1bn while the group has £12.9bn in assets.