A joint venture between Ping An Real Estate and Landsea Green Group, the listed platform of Nanjing-based Landsea Group, has agreed to acquire an office property in Shanghai’s Zhangjiang High Tech Park, for an undisclosed sum, according to a Hong Kong Stock Exchange filing by Landsea Green.
The mainland developer and its insurance company backer are purchasing buildings No 1 and No 2 at 201 Keyuan Road in the Pudong commercial cluster from Shanghai Jiali Mine Electronics Limited, according to the company announcement, which did not specify the financial consideration involved.
The deal, which was arranged through Jiaxing Long Rich Investment Limited, in which Ping’An holds a 70 percent stake and Landsea Green the remaining 30 percent equity interest, is the latest cooperation by the two companies, with Ping An already Landsea Green’s second largest shareholder, with the financial services giant holding a nearly 28 percent stake in the developer.
Ping An-Landsea Platform Expands into Office Sector
Ping An and Landsea Green say that they plan to hold and manage the properties, which are are located adjacent to the Pudong Inner Ring Road and Longdong Avenue, through their existing real estate fund Green Fir Investment. The partners noted that this latest acquisition represents “a new adventure into the office building sector and allows the partners to lease out assets in the future and generate value-added revenue.”
The two companies revealed that they would provide their joint venture fund management platform with the necessary funds to conclude the transactions through shareholder loans, without specifying the amount of funding.
In its statement, Landsea Green said that, “the Target Properties demonstrate their great potential for renovation and appreciation.” The company further explained that it plans to improve the pair of office properties through renovations and other enhancements.
Listings on mainland property websites indicate that 201 Keyuan Road, the address listed on Landsea’s announcement is the home of the Zhangjiang Jiali Building, a six-storey structure that has been around since the high tech park’s early days in 1996.
Offices in the 20,000 square metre (215,000 square foot) facility are currently available for asking rentals of RMB 3 per square metre per day (approximately $13.26 per square metre per month). Sporting Shanghai’s classic blue windows and ceramic tile cladding of earlier days, the grade C structure is just under one kilometre north of the Zhangjiang High Tech Park metro station on line two.
Office Deal Follows Residential Fund
Ping’An and Landsea Green have forged a close partnership in recent years.
In January 2018 the two companies struck a deal to set up a $1.5 billion fund that would support the development of multi-family projects in mainland China. Under the terms of that arrangement, the two companies agreed to jointly invest in long-term rental apartment projects in top-tier mainland cities including Beijing, Shanghai, Guangzhou and Shenzhen, as well as smaller urban hubs such as Nanjing and Hangzhou.
That fund deal came after the companies, along with China Merchants Property Development, joined forces in 2015 to develop two residential projects in Nanjing.
In 2015, Landsea Green raised HK$340 million in net by selling new shares and perpetual securities to Ping An Real Estate. Through four separate units, Ping An Group now holds just under 28 percent of Landsea Green’s shares.