Morgan Stanley to Sell Shanghai Project for RMB 3-3.5 Billion

According to informed sources, a  Morgan Stanley managed real estate fund is wrapping up negotiations to sell the Life Hub @ Jinqiao office and retail project in Shanghai’s Pudong district for between RMB 3 billon and RMB 3.5 billion.

While the buyer for the project remains unspecified, according to a report in the Wall Street Journal, the prospective buyer is an Asian-based property fund. The Jinqiao Life Hub project is currently 80 percent owned by the Morgan Stanley managed MSREF V fund and 20 percent owned by Chongbang Group from Hong Kong.

In addition to the Jinqiao project with Morgan Stanley, Chongbang Group has successfully developed a number of other retail and office developments in suburban areas, including the Life Hub @ Daning and Life Hub @ Anting projects in Shanghai.

If the Jinqiao project sells at the price reported, then the MSREF V fund would earn a return of two and a half times its investment, according to sources.  The land cost MSREF V CNY640 million in 2006 and the project has been on the market for several months.

Life Hub @ Jinqiao,  opened in late 2009 and has a gross floor area of more than 180,000 square metres, with 98,000 square metres of retail space and 16,000 square metres of office space. The complex includes eleven buildings and won a Global Award for Excellence this year from the non-profit Urban Land Institute.

MSREF V International fund was established in 2006 with $4.2 billion of equity commitments. The broker for Morgan Stanley in the transaction is Jones Lang LaSalle.