Chinese property development and investment firm CIFI Holdings has entered into an agreement with Singapore’s sovereign wealth fund GIC to launch a 7-billion-yuan ($1.025 billion) investment platform for residential projects in eastern China’s Yangtze River Delta.
Hong Kong-listed CIFI will hold 51 per cent and GIC will hold a 49 per cent stake in the investment platform, the former announced in a statement on September 11.
In January this year, CIFI’s housing rental service arm Umihome had joined hands with GIC to launch an investment platform with $570 million for long-term rental apartments in China. The platform intends to invest in projects at premium locations in the country’s first- and second-tier cities in the next four years.
Umihome is responsible for the renovation, development, and operation of the portfolio. The CIFI affiliate had 69,000 apartments under its operation across 20 cities in China as of January 2020.
Dual-headquartered in Shanghai and Hong Kong, CIFI develops various real estate projects including residential, office and commercial property with a strong presence in major first-, second-, and third-tier cities in China.
The firm booked 23.02 billion yuan ($3.37 billion) in recognised revenue in the first half of 2020, up 11.3 per cent year-on-year. Its core net profit grew 11.2 per cent to reach 3.19 billion yuan ($467 million) compared to the same period in 2019, according to its unaudited interim results in H1 2020.
CIFI and GIC are looking to cash in on China’s lucrative property market, which has been a major driver of the country’s domestic recovery. Home sales and real estate investments have grown at a robust pace after the lifting of coronavirus lockdowns.
According to industry researcher Qianzhan.com, the market size of property investment and development in China reached 13.22 trillion yuan ($1.93 trillion) in 2019, up 9.9 per cent from the previous year. In the first half of 2020, the number stood at 6.28 trillion yuan ($919 billion), up 1.9 per cent year-on-year despite the virus-induced slowdown.
The share of residential property investments in China grew faster than office buildings and commercial properties between 2015 and 2019. Residential property investments accounted for 73 per cent of overall real estate investments in the country at end-2019, according to Qianzhan.com.