Investment Firm Led by Former C&W Boss Buys Beijing R&D Building From Sino-Ocean

GLP-backed ACR Asset Management on Thursday revealed its acquisition of the Beijing Diamond Plaza building in the Chinese capital’s primary technology hub.

Founded by Edward Cheung, the former chief executive for Greater China at Cushman & Wakefield, newcomer ACR bought the R&D building in Zhongguancun Software Park from private equity firm Sino-Ocean Capital for an undisclosed amount.

Located in the Shangdi area of Beijing’s Haidian district, the facility sits in close proximity to the head offices and global R&D centres of hundreds of renowned IT companies, ACR said, one example being the global headquarters of internet giant Baidu located across the street.

“We are pleased to have finalised the takeover of the Diamond Plaza with Sino-Ocean Capital,” Cheung said. “In this takeover, we adopted our investment strategy to respond to the near-term economic transition and market adjustment, namely, focusing on dynamic submarkets in China’s emerging industries, such as hi-tech innovation park properties that act as platforms for industrial innovation.”

ACR’s deal comes as betting on demand from fast-growing tech occupiers for large-floorplate suburban commercial space continues to gain favour among office investors in China.

Hive of Activity

Diamond Plaza has 22,000 square metres (236,806 square feet) of leasable area and was 100 percent occupied as of 30 June 2020, according to a report released last year by Hong Kong-listed Sino-Ocean Group.

ACR said the building enjoys a positive leasing outlook and a high potential for appreciation as China’s economic recovery from the COVID-19 pandemic continues and tech firms assume the mantle of new growth drivers.

Since ACR’s founding less than two years ago, the acquisition of the three-storey office block is the firm’s first major investment after a COVID-delayed start. Cheung’s former firm Cushman & Wakefield is understood to have advised on the transaction.

Last year, the Shanghai-based firm won agreements to provide asset management services for a pair of business park facilities in China’s commercial capital, including GLP I-Park Shanghai Jing’an, a 30,000 square metre project at the North Hi-tech Park just north of the middle ring road in what was formerly known as Zhabei district.

The company also manages GLP I-Park Shanghai Yunchuang, a commercial complex in Minhang district’s Pujiang town that includes four office buildings, two R&D facilities and a flexible shared office and event area.

Singapore-based GLP, Asia’s biggest warehouse developer and fund manager, is ACR’s strategic investor. Ming Mei, GLP’s co-founder and chief executive, holds those same titles at ACR, and Teresa Zhuge, executive vice chairman of GLP China, also sits on ACR’s board.

Nice Neighbours

Technology occupiers led by Chinese groups are expected to account for at least a fifth of Asia Pacific leasing demand from 2020 to 2025, according to a February report from Colliers International.

Leading Chinese tech firms like Alibaba, Tencent, Meituan, JD.com, Baidu and Xiaomi are some of APAC’s fastest-growing groups and are changing the shape of office demand in the region, the report said. Xiaomi, which has expanded from cheap mobile phones into a variety of home gadgets, is Zhongguancun’s most valuable company, with Meituan and ByteDance also making their home in the area near Peking University, Tsinghua University and the Chinese Academy of Sciences.

Tech giants now occupy 2 million square metres of APAC office space for headquarters purposes, including taking up 10 percent of prime office stock in key Chinese markets like Beijing, Shanghai, Shenzhen and Hangzhou.

Colliers predicts increasing demand for Grade A space in mainland China tech hubs like Zhongguancun and Wangjing in Beijing, as well as in Shanghai’s Caohejing and Zhangjiang areas and sections of Shenzhen’s High Tech Park.