Azure Capital Partners, a real estate investment platform backed by Hong Kong-listed H World Group Limited (Huazhu) and global leading institutional investors, has received fresh investment from Chow Tai Fook Enterprises Limited (CTFE) to expand its activity in China’s hospitality and multifamily sectors.
CTFE is the flagship private investment holding company of the Cheng Family in Hong Kong. The deal includes investment in Azure Capital at both the corporate level and in the company’s investment vehicles.
“The investment by CTFE testifies to Azure’s success in sourcing and implementing both hospitality and rental apartment opportunities in China, and we look forward to working with our new partners to produce robust returns as the country’s lodging sector continues to grow,” said Peng Yang, Chief Executive Officer of Azure Capital.
Strategies Riding China’s Megatrends with Growing Investor Interests
The Chinese lodging sector has witnessed resilient performance since the pandemic. With Chinese policymakers focusing on restructuring the housing market, a barrage of support measures for the rental apartment sector have been introduced to vitalize the market. The hospitality market has outperformed other real estate asset classes thanks to strong growth of domestic travel demand.
Since its establishment in 2020, Azure Capital has set up a strategy to tap huge demand and growth in the Chinese lodging sector. Now the company has assembled a portfolio of four operational select service hotels, and a rental apartment project under development, all of which are located in first tier cities.
“We have identified select service hotels as an attractive real estate asset class for investment. The sector provides customer with a quality accommodation experience at a favorable price. This product enjoys a huge and growing customer pool given the expansion of the middle class and constraints on business travel budgets in China,” Peng said. “Select service hotels have favorable income stability and operating margins which translate into attractive property yields for investors. We have seen increasing market awareness of these advantages, and aim to seize the current window for acquisition of core assets at prime locations in China’s gateway cities.”
The CTFE investment showcases the interests from leading investors on China’s lodging sector. CTFE has a long track record in real estate investments globally. It is the owner of a diversified portfolio of properties throughout Europe and Americas and is the parent of New World Development and New World China Land. In mainland China, CTFE’s portfolio features a number of mixed-use property projects in prime locations across key gateway cities such as the Guangzhou Chow Tai Fook Finance Centre managed by K11 and Rosewood, both operating entities within the group.
Ample Dry Powder with Deep Industry Know-How
Following the investment from CTFE, Shanghai-based Azure Capital has ample dry powder across two separate vehicles – one each for hospitality and multifamily strategies.
With the fresh cash in hand, Azure Capital aims to continue to pursue its strategies for hospitality and multifamily investment in China’s first tier cities. For both strategies, the company is prepared to undertake new acquisitions ranging from greenfield development to urban renewal and is capable of positioning the investment targets as hotels, rental apartments or a mixture of both property types, based on their best use.
The company’s key team members are all real estate veterans with work experience at top tier real estate investment institutions and hotel management companies, according to Peng, who held senior roles with China-UK joint venture firm Everbright Ashmore and with CITIC Securities before joining the company in 2020.
“Our shareholder has been very supportive in aspect of hotel and rental apartment operation management and industry know-how. Huazhu, together with its rental apartment arm Chengjia, have and will continue to help Azure to deliver robust investment return for our investors,” said Peng, “And we are confident that onboarding our new investor will unlock more synergy and bring Azure Capital to next level.”
Founded in 2005 and listed on both the NASDAQ and the HKEX, Huazhu Group is China’s second largest hotel group with 10,286 hotels and over 1 million rooms under operation, a portfolio of 31 hotel brands and membership program of over 200 million members. Co-founded by Huazhu Group and IDG Capital in 2015, Chengjia Apartment is China’s leading rental apartment operator.
Leave a Reply