Ascendas REIT Exits China With Sale of Shanghai Biz Park To Vanke For $163.5M

China Vanke is now the proud owner of a Shanghai business park after agreeing to purchase A-REIT City@Jinqiao from Ascendas Real Estate Investment Trust for S$228.1 million ($163.5 million). The purchase will see the real estate investment trust controlled by Singapore’s Ascendas group exit China for the time being, having divesting its two other industrial properties in the country earlier this year.

The deal also is a sign of further diversification into commercial projects by China Vanke, which grew to be the mainland’s largest real estate developer primarily by building homes for the country’s middle class.

The Singapore-listed REIT has sold the development a little more than three years after acquiring the 78,900 square metre project in Shanghai’s suburbs. A-REIT bought the business park in June of 2013 from a Singapore-based subsidiary of Chinese developer Qingjian Group for RMB 593.5 million ($87.5 million).

A-REIT City@Jinqiao is located in the north section of the Jinqiao Economic and Technological Zone in Shanghai’s Pudong district and according to A-REIT, includes both multinational companies and large local corporations among its tenants.

A-REIT Leaves China As Fund Looks Forward

It has been a busy year for the Singapore-listed A-REIT who have divested their entire China portfolio beginning with May’s sale of the Ascendas Z-Link business park for S$160 million (US$117.6 million) to Cova Beijing ZPark Investment.

One month later, A-REIT unloaded its entire equity interest in a logistics center just outside Shanghai to the Australia-based Goodman Group for S$26 million ($19.1 million). The selling of the trust’s last remaining Chinese asset sees its portfolio now consist of projects in Singapore and Australia.

Chia Nam Toon, Executive Director and CEO of Ascendas Funds Management, the REIT’s manager, explained in a press release that the divestment will provide the trust opportunity to redeploy capital and optimize returns moving forward.

In September, A-REIT purchased a business park in Sydney and a logistics facility in Melbourne for a combined A$168.2 million ($127.7 million).

Vanke Gets Commercial

Vanke acquired the business park through a pair of indirectly owned subsidiaries in what is the latest in a string of non-residential projects for China’s largest homebuilder.

The Shenzhen-based developer took on its first business park project several years ago, building low-rise commercial buildings in that city’s Qianhai district, bordering Hong Kong. Those properties were later packaged into a REIT-like product and marketed to investors.

In 2014, the developer founded by entrepreneur Wang Shi invested in a 160,000 square metre business park project in Shanghai’s Zhangjiang High Tech Park through a joint venture with local Shanghai partner, Tian An Cyber Park.

This year Vanke has invested nearly $3.5 billion in commercial assets including a $1.9 billion deal with Blackstone Group to purchase the SCP mall portfolio,. and buying the Central Plaza office tower in Shanghai from Carlyle Group for RMB 2.46 billion ($368.94 million) in August.