Joint venture real estate investment firm Everbright Ashmore announced last week that it had sold a 128,381 sqm shopping mall in Chongqing, China. The sale happens at a time of increased interest in China real estate assets from international private equity players, although the name of the buyer has not yet been announced
According to a statement from the company, Everbright Ashmore realized an IRR of 27% and multiple of over 2.1x for its investors from the sale of the IMIX Park mall. The statement did not specify the price that the asset was sold for, nor the name of the new owner. During 2013 many investment firms have shifted their focus away from China’s emerging cities to focus on what is seen as lower risk opportunities in Shanghai and Beijing.
Commenting on the sale, James Pan, CEO of Everbright Ashmore, said, “We are very pleased with this second exit from Fund I, which combined with the proceeds from two residential projects, means we have been able to return over 50% of invested capital back to our investors in our first fund.”
The sale of IMIX Park, which is located in the Guanyinqiao shopping area in Chongqing, was the second successful exit from Everbright Ashmore China Real Estate Fund I, which was launched in 2009 with US$153 million in capital.
Mr Pan also indicated that Everbright Ashmore is in the process of launching its second fund, Everbright Ashmore China Real Estate Fund II.
Everbright Ashmore is a Beijing-based joint venture fund manager which is majority owned by China’s state-owned Everbright Group. Ashmore Investment Management, the London-based emerging-markets investor, purchased a 39% stake in the firm in 2010, and RSQI, a property manager is also a minority shareholder.
During this year global private equity firms such as Carlyle, Blackstone and KKR have accelerated their purchases of Chinese real estate assets, providing a ready market for local and regional investors to sell existing holdings.