Ping An Real Estate and Landsea Green Properties plan to form a RMB10bn (€1.3bn) multi-family fund, to own and operate residential properties in key Chinese cities.
In a filing to the Hong Kong Securities Exchange last week, Landsea Green said the strategic cooperation agreement commits the partners to acquire apartments for long-term rental and to jointly seek potential development opportunities.
Their strategy is to focus on Beijing, Shanghai, Guangzhou and Shenzhen, and key second tier cities including Nanjing, Hangzhou and Wuhan.
It said after stabilising the operation of the rental business, the partners intend to exit the cooperation fund through a real estate investment trust.
Over the next three years, the fund aims to have assets under management totalling “approximately RMB10bn”, said Landsea Green in a filing to the Hong Kong Stock Exchange.
However, it said that although they reached an agreement to form such a residential fund last November, the parties have yet to formalise their joint venture.
It said the parties jointly acquired Shanghai Senlan project in November 2017, with an intent to transform to develop middle and high-end, long-term rental apartments.
Landsea Green itself has already been active in the residential market in Chinese cities.
It said “within just one year” it has acquired more than 50 projects offering more than 15,000 rooms in several Chinese cities, including Beijing, Shanghai, Guangzhou and Shenzhen.
It also said that over the past year, it has been actively exploring the best options to lease and turn the residential stock into long-term rental apartments.
Ping An Real Estate, a unit of Ping An insurance group, first formed a relationship with Landsea in November 2015 when it acquired a 14% stake in with the listed company.
Landsea Green commented in last week’s voluntary filing that Ping An Real Estate has “huge finance and industrial resources advantages in respect of leasing properties investment”.