Real estate private equity firm Gaw Capital Partners announced yesterday that a company belonging to one of its funds has signed a conditional agreement to acquire Richard Li’s Pacific Century Place in Beijing for US$928 million.
The sale by Li’s Pacific Century Premium Developments Ltd (PCPD) follows soon after the Hong Kong princeling’s father, and Asia’s richest man, Li Ka-shing, began divesting of mainland real estate assets owned by his Cheung Kong Holdings and other firms after calling the market overvalued.
The acquisition by Gaw was said in a statement by the company to be the biggest single-asset transaction invested by a foreign real estate private equity fund in China.
Gaw Already Familiar with Beijing Market
Pacific Century Place is located in Beijing’s popular Sanlitun area, and the potential sale of the mixed-use commercial development was first announced in January of this year.
The approximately 169,900 square-meter asset comprises two towers of offices, two towers of serviced apartments and a shopping mall. Gaw is already familiar with the Beijing market having invested in or managed a number of properties in the area, including Taikoo Li in Sanlitun, Hotel G Beijing, and Embassy House.
Kenneth Gaw, President and co-founder of Gaw Capital Partners said of the acquisition: “This is a rare opportunity to be able to acquire such a large cash flow asset in a prime and irreplaceable area in Beijing. We believe this type of asset will continue to outperform.”
Gaw Capital Partners currently manages four real estate funds targeting the Greater China and Asia Pacific region, while Gaw Capital Partners USA provides services for separate account direct investment and private equity real estate fund management in the U.S. and U.K. markets. In November Gaw announced the final close of its fourth China real estate fund, Gateway Real Estate Fund IV last after the fund reached its hard cap size of US$1.025 billion.
Li Follows Father in Cashing-In China Assets
Richard Li’s decision to sell his Beijing property appears to fit with a family belief that China’s real estate market has already peaked.
On January 1st the elder Li’s ARA Asset Management Ltd, announced that it was selling the Nanjing IFC commercial building in the eastern China city of Nanjing for a price which sources close to the deal cited as 3 billion Chinese yuan ($496 million).
The Nanjing sale was preceded by Li’s Hutchison Whampoa Co Ltd selling the Oriental Financial Center in Shanghai’s Pudong District to China’s Bank of Communications for US$1.15 billion during October. In September, Hutchison, together with Li Ka-shing’s Cheung Kong Holdings Ltd, announced that they were selling the Metropolitan Plaza in Guangzhou’s Liwan district for US$390.7 million.