Ivanhoe and APG Lead $920M Capital Raise by Shanghai’s Chongbang

Hong Kong-based developer Chongbang Group closed a $920 million round of fund raising this week with Canada’s Ivanhoe Cambridge and Dutch pension-fund manager APG taking leading roles in the investment.

Chongbang focuses on the Shanghai market and began making its mark in the city more than a decade ago with the Life Hub@Daning mixed-use project in Zhabei district. The company, which was founded in 2003 has since gone on to successfully execute a series of similar projects in and around China’s commercial centre.

Now the Chongbang says that it is earmarking this latest batch of capital for further shopping centre projects in what it calls “core retail precincts” of Shanghai, and both Ivanhoe and APG appear to be impressed enough by this development vision to make Chongbang their latest bets on China’s real estate industry.

Betting on Integrated Projects in Shanghai

Chongbang now owns and operates 428,000 square metres (4.6 million sqft) of retail and commercial space in and around Shanghai with another 417,000 square metres (4.5 million sqft) under development.

Since opening the Life Hub@Daning project in 2006, the company has gone on to build a second LIfe Hub project in the Jinqiao area of Pudong, and has two more Life Hub developments underway – one in Anting in northern Shanghai, and another in Kunshan, just across the border from Shanghai in Jiangsu province.

In addition to the Life Hub projects, Chongbang also developed the high-end Sinan Mansions retail development in Shanghai’s downtown Huangpu district. The pedestrian village of 49 restored villas opened in 2010 and includes a hotel, apartments and commercial space.

Chongbang was founded in 2003 by a group of Singaporean and Hong Kong investors, led by Shui On Land veteran Henry Cheng and Stephen Wong of Hong Kong family run developer Edward Wong Development.

Cheng, who was involved in Shui On’s successful Xintiandi development in Shanghai, continues to lead Chongbang as CEO and frequently speaks on mixed-use development approaches at industry events. The group previously received institutional backing from Singaporean sovereign wealth fund GIC, which continues to hold shares in the company.

Ivanhoe and APG Up China Property Investments

While the exact composition of the $920 million financing round was not made available, a joint statement by Ivanhoe, APG and Chongbang made it clear that the two investors led the institutional capital raise.

“Chongbang’s team has an outstanding track record and a compelling long-term vision. They are known for solid execution in creating and managing mixed-use, retail-focused projects. Now, they are better positioned than ever to respond to evolving consumer preferences and to new technologies that are reshaping the customer experience,” said Rita-Rose Gagné, Executive Vice President, Growth Markets, for Ivanhoé Cambridge.

Ivanhoé Cambridge which is a real estate subsidiary of Montreal-based fund manager Caisse de dépôt et placement du Québec, has already partnered in China with developers Shanghai Forte Land (a subsidiary of Fosun) and with Bailian Group. Caisse is one of Canada’s leading institutional fund managers and, as of December 31, 2014, held $225.9 billion in net assets.

Sachin Doshi, Managing Director and Head of Private Real estate Investments, Asia-Pacific at APG, explained the Dutch fund manager’s interest in the deal in terms of locations and teams. “The investment in Chongbang builds on APG’s strategy to increasingly participate in city-specific platforms in key gateway urban centres around the world, in sectors with compelling long term fundamentals and through partnering with management teams with unparalleled execution capability in their local markets,” the Singapore-based executive said.

APG Asset Management of the Netherlands manages Dutch pension assets of more than €430 billion ($482 billion) as of the end of April this year.

One year ago APG committed up to $650 million to acquire 20 percent of China warehouse developer and operator e-Shang, and to set up a joint venture with the Warburg Pincus-backed startup.