APG and Ivanhoé Cambridge have invested a combined $850m (€760m) in Chinese developer Chongbang.
The Shanghai-based company raised a total of $920m from investors in what is its second institutional capital raising effort.
Ivanhoe Cambridge, the real estate subsidiary of Caisse de depot et placement du Quebec, provided more than half ($500m) of the capital. APG, the asset manager owned by Dutch civil service pension fund ABP, has taken a $350m stake.
Rita-Rose Gagné, executive vice-president of growth markets at Ivanhoé Cambridge, described it as a “milestone” investment for the company’s strategy of increasing exposure to “key growth markets, where China is an important pillar”.
Sachin Doshi, APG’s head of private real estate investments for the Asia-Pacific, said the investment fits within APG’s strategy to participate in “city-specific platforms in key gateway urban centres around the world”, partnering with local management teams.
“Rapid urbanisation, growing disposable incomes and continued rebalancing towards domestic consumption are recurring themes in China, and Shanghai will lead this consumption story,” he said.
“We like Chongbang’s deep understanding of consumer preferences and the strong lifestyle-themed retail complexes they have built and operated successfully under the Life Hub brand.”
Harmen Geers, spokesman for APG, added: “To get a foothold in China, finding the right local partner is crucial.”
Last year, APG made a €578m commitment to Shanghai-based logistics developer e-Shang.
Shanghai-based Chongbang was founded in 2003 by Singaporean and Hong Kong investors, led by Stephen Wong and Henry Cheng.
The company owns and operates 428,000 sqm of mixed use retail and residential property, as well as commercial space in Shanghai, with another 417,000 sqm under development.
Cheng, Chongbang’s chief executive, said the company aimed to more than double its portfolio over the next few years to consolidate its position as a “landlord of choice” for top retail and lifestyle tenants in the Shanghai area.
Singapore’s sovereign wealth fund GIC and the Edward Wong Group are among the main shareholders of Chongbang.