Canada Pen­sion Plan to put funds into China rental hous­ing units with Long­for

Global Times US Edition - - BIZOVE -

Canada Pen­sion Plan In­vest­ment Board (CPPIB) said on Thurs­day it will in­vest in China’s rental hous­ing sec­tor with lo­cal prop­erty de­vel­oper Long­for Group, with an ini­tial tar­geted in­vest­ment of $817 mil­lion.

The com­pa­nies will in­vest in first-tier and core sec­ond-tier cities via de­vel­op­ments, ac­qui­si­tion and mas­ter-lease of com­mer­cial as­sets to be con­verted into rental hous­ing, CPPIB said in a state­ment.

Bei­jing-based Long­for, China’s No.9 home­builder by sales value, is one of the most ag­gres­sive play­ers in the pol­icy-sup­ported rental hous­ing sec­tor, with a tar­get to add 45,000 new units in the sec­ond half to its 20,000-unit port­fo­lio. It ex­pects op­er­at­ing in­come from rental hous­ing busi­ness to ex­ceed 3 bil­lion yuan ($448.6 mil­lion) in 2020.

The com­pany was the first in the coun­try to is­sue bonds to the pub­lic for the busi­ness, as Chi­nese de­vel­op­ers have been rush­ing to raise funds, in­clud­ing via the se­cu­ri­ti­za­tion and debt mar­ket, since the sec­ond half of last year for the low-re­turn sec­tor.

China an­nounced plans in Au­gust to launch pi­lot pro­grams in 13 ma­jor cities, in­clud­ing Bei­jing and Shang­hai, to de­velop rental hous­ing projects in an ef­fort to ease a hous­ing shortage.

“De­mand for mod­ern, qual­ity rental hous­ing among young pro­fes­sion­als and new grad­u­ates in China is grow­ing rapidly, and through this col­lab­o­ra­tion, we are pleased to have the op­por­tu­nity to par­tic­i­pate in this fast-grow­ing sec­tor of Chi­nese real es­tate and to fur­ther di­ver­sify our in­vest­ments in the mar­ket,” said Jimmy Phua, CPPIB’s Asia head of real es­tate in­vest­ments.

CPPIB and Long­for be­gan col­lab­o­rat­ing in 2014 with in­vest­ments in re­tail malls and mixed-use projects.

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