Ziroom has received investment from Tencent and Softbank
US asset manager Invesco is expanding its bets on the living sector in Asia Pacific through a joint venture with a Tencent-backed apartment management platform to invest in and operate rental housing in China.
In a joint statement with Ziroom, which manages nearly one million rooms, primarily in mainland China, Invesco announced the formation of Izara Holdings, a strategic partnership which will serve as the exclusive platform for both companies to invest and operate rental housing assets across China.
Despite declines in home prices across mainland China, housing in the country’s major cities remains among the least affordable in the world, with Invesco and Ziroom positioning Izara to provide rental homes as an alternative.
“There is a fundamental shortage of institutional-quality rental housing in primary cities such as Shanghai and Beijing,” said Calvin Chou, head of Asia Pacific for Invesco Real Estate. “As demand remains supported by strong demographic trends and the need for modern and affordable rental accommodations, we believe this joint venture will fill a clear market void while setting new industry benchmarks.”
Western Beijing Project
Invesco and Ziroom are set to launch their joint venture with a 1,500-room development in Beijing’s Shijingshan district, which they estimate will require investment of RMB 1.2 billion ($165 million). The purpose-built rental housing on the western side of the Chinese capital is expected to be completed in 2027.
Calvin Chou, head of Asia Pacific for Invesco Real Estate
The project brings Ziroom, which began as a platform for managing rental of apartments owned by private individuals, into a new model where it manages assets as well as properties, expanding on its existing systems.
“This collaboration presents an exciting opportunity to build and own better living products, created through the Izara platform,” said Ziroom Asset Management chief executive Meng Yue. “Izara is committed to the long-term growth of China’s rental housing market. By integrating our technology-driven approach with Invesco’s investment acumen, we aim to redefine the rental housing experience in China, providing residents with high-quality, well-managed living spaces.”
With Invesco currently managing $14 billion in rental and residential assets across more than 45,500 units, the company has experience in a variety of living strategies, while Ziroom stands as the largest institutional housing rental platform in China, according to the statement.
“By combining our global investment expertise with Ziroom’s innovative operational capabilities, Izara aligns squarely with our vision to deliver high-quality, efficient rental housing solutions and attractive investment opportunities for our global clients,” Invesco’s Chou added.
Izara aims to offer institutional-quality rental communities that provide superior living experiences for residents, according to the statement, while the joint venture will also explore investment and securitisation models within the rental housing sector.
Rental Housing Appeal
The joint venture with Ziroom makes Invesco the latest global investor to pursue the returns generated from rental housing in China, with Ziroom itself having previously received investment from Warburg Pincus, Sequoia Capital China (now Hongshan) and Softbank, in addition to Tencent.
Warburg Pincus has been among the biggest international backers of rental housing in China, with the company having invested in Shanghai-based platform VLinker, which now has a portfolio of 40,000 rooms across China, including completed and pipeline projects.
In January of last year, LaSalle Investment Management launched a pair of rental apartment projects in Shanghai under its Cozi brand, and Brookfield Asset Management entered China’s rental residential market in 2022 with the $180 million acquisition of a rental project in Shanghai’s Yangpu district.
In addition to its China rental housing strategy, Invesco teamed up with Tokyo-based Alyssa Partners in 2023 to acquire a set of 15 Japanese apartment buildings.
Leave a Reply