The second joint-venture investment between the HSBC NF China Real Estate Fund, Metro and Tesco, has bought two centres in Fuzhou and Xiamen in the southern Chinese province of Fujian and a third in Shenyang in the north-east Chinese province of Liaoning.
All of the malls, which will total 2.47m sq ft, are under development and anchored by a Tesco hypermarket. The remaining space is to be let to a mix of international, national and regional brands.
The first joint venture for two mixed-use developments and one mall development in north-east China closed in December 2009. All three schemes opened in 2010.
“The properties will be developed and managed by Tesco who are an experienced partner with a strong track-record in both Europe and Asia,” said Stuart Jackson, head of real estate for HSBC Specialist Investments, the infrastructure and real estate equity arm of HSBC.
“The investment provides exposure to domestic retail consumption which is expanding rapidly.”
This latest investment follows the completion of the fund’s first two asset sales and two partial exits of pre-IPO investments, returning proceeds of $268m.
The fund’s sales were One Financial Street in Beijing’s financial district, consisting of twin 20-storey office towers and a four-storey retail podium, and Metropolis Tower in ZhongGuanCun, Beijing’s centre of high technology and higher education.
Additionally, the fund has achieved two partial exits of pre-IPO investments in Glorious Property Holdings and Fantasia Holdings Group, two Chinese developers. The rund remains a minority shareholder of both companies.
HSBC NF China Real Estate Fund is a joint venture private equity fund between HSBC Specialist Investments and Nan Fung, a Hong Kong-based developer. The fund has $700m of equity commitments and has to date invested in 11 projects.