The real estate billionaire behind a Shanghai shopping mall and hotel plans to buy up the majority of an upcoming Singapore REIT offering as China’s property developers continue to look for ways to invest their wealth overseas.
According to a story in Reuters today, Tong Jinquan, the owner of the Longement Hotel and the Cloud Nine shopping complex in Shanghai is planning to invest S$223 million (US$180 million) into the S$372 million (US$299 million) IPO of IREIT Global. The Singapore-listed real estate investment trust is targetting investments in European properties.
Mr Tong, who stayed in school only through the fifth grade, is ranked by Forbes as China’s 36th richest man with a personal wealth estimated at US$2.7 billion, and his Summit Group had total assets of RMB 64.9 billion (10.46 billion) at the end of last year. According to Chinese industry websites, the Shanghai tycoon is among the 10 wealthiest property investors in China.
Tong has shown a strong preference for Singaporean assets, and in addition to his planned role in IREIT Global, has already taken substantial stakes in several other Singapore-listed REITS.
The former worker in a ping pong equipment factory already owns a 64.75 percent of Viva Industrial Trust, 4.58 percent of Suntec Real Estate Investment Trust, 12.93 percent of Cambridge Industrial Trust and 16.20 percent of OUE Commercial Real Estate Investment Trust.
With a portfolio of four properties in Germany, IREIT already has a portfolio of four properties in Germany, and also is expected to have assets in the UK.
As China’s real estate prices have begun to slow, mainland billionaires such as Tong, who made their fortunes in the country’s property markets, have increasingly begun to look overseas for higher returns, or for opportunities to hedge their risks.