China Vanke plans to buy the Central Plaza office tower in Shanghai from Carlyle Group for RMB 2.46 billion ($368.94 million), according to media reports. Should the deal be completed it would be the third time the building has changed hands in the past decade.
The developer will complete the purchase through its wholly owned private equity arm V Capital, according to a Basis Point report cited by Reuters. The report also noted that Vanke is expected to sell 90 percent of the tower to a currently unknown third party while retaining a ten percent stake.
Carlyle bought Central Plaza in 2013 from Singapore-based Forterra Real Estate for US$266 million. Forterra had purchased the office tower in 2007 and began a massive renovation and refurbishment of the building before relaunching it in 2010.
The grade A office tower has 19 stories and is situated above a three-story podium featuring food and beverage outlets. It has a total gross floor area in excess of 47,200 square meters.
Foreign Investors Sell Mainland Assets as Prices Rise
The yuan has depreciated 6.9 percent against the dollar during the past 12 months and this, coupled with rising property prices in Shanghai, has seen international private equity funds cash in on existing assets and look for opportunities elsewhere.
Vanke also took advantage of this trend in July when it purchased the Insite mainland mall portfolio from Blackstone for a reported $1.9 billion.
Just one year ago, a joint venture between Carlyle Group and CLSA Capital Partners sold a 25-story grade A office tower to Yuexiu REIT for RMB2.63 billion ($423 million). The JV purchased the office tower in 2012 from the ASE Group for RMB 1.8 billion ($269 million).
Vanke Makes News as Buyer Instead of Target
Vanke, China’s largest developer by sales, has been in the news quite a bit during the past year as it has looked to expand beyond the residential sector including buying the Central Plaza office tower and the aforementioned Blackstone deal.
Last year, Vanke formed a joint venture with oyster sauce producer Lee Kum Kee to purchase an office tower from cash-strapped developer Shui On Land. The JV bought Corporate Avenue 3 in Shanghai’s Huangpu distrctfor RMB 5.7 billion ($885 million), and some analysts are speculating that the pair may be teaming up again for the Central Plaza deal.
More recently, the property giant invested RMB 300 million ($45 million) in financial technology platform Penging. The deal saw Vanke become the fintech platform’s biggest shareholder.
Vanke spent the first half of 2016 fighting off a rare hostile takeover attempt from financial conglomerate Baoneng in a siege that has yet to be resolved.