05 September 2005
Macquarie Property's Investment Banking business today announced the purchase of a 26 storey tower of residential apartments in Shanghai, China which caters to the corporate, long term rental accommodation sector.
Announcing the acquisition, Head of Macquarie Property Investment Banking, Matthew Banks said: "We have been active in the Chinese residential property market for over 10 years and this acquisition is a continuation of Macquarie's strategic interest in China's residential sector."
"City Apartments is a high quality asset and the Bank will investigate various options for end ownership. We are seeing increasing interest by major institutional investors in real estate investments in China and other Asian countries. Our global network provides the access to expertise and experience in creating innovative investment products and managing foreign capital in the region."
Comprising 90 high quality apartments ranging in size from 160sqm to 300sqm, City Apartments, completed in 2000, is strategically located in downtown Shanghai in the heart of the commercial business centre. The apartments are in high demand from the foreign corporate sector, seeking to house its expatriate senior management. This is demonstrated by its high occupancy, averaging in excess of 85 per cent over its five year history.
"Managing Director of Macquarie Property China, Richard David, said the growth outlook for the Shanghai residential market in the inner city remained positive. "There are very few opportunities to develop a residential property in inner city Shanghai. City Apartments provides an excellent opportunity to acquire an existing quality income-producing asset at a price reflecting the value and growth in the market."
The Shanghai property market has witnessed a slow-down over the past quarter as Government-imposed restrictions attempt to drive speculators out of the market. "The actions by the Government have sought to rein in speculative investment and early signs are that they are having some success particularly with the middle class product in suburban Shanghai," Mr David said. "However, due to the lack of development opportunities in the inner city, prices are holding up and as such we have a high degree of confidence in the premium, long-term rental accommodation sector. Furthermore given that we have a long term commitment to the China market, the prospect of a speculative play did not factor into our deliberations."
Macquarie Property has more than 350 staff worldwide. Macquarie Property Investment Banking has been active internationally since 1994 and is a market leader in Australia in wholesale investment management, capital raising, debt/transaction structuring, major project financing, property developments and asset disposals. More than $A24 billion in property assets is managed under the Macquarie brand across a portfolio of listed and unlisted property trusts, unlisted development funds and property investment syndicates, globally.
For further information, please contact:
Head of Macquarie Property Investment Banking
Tel: (612) 8232 3333
Macquarie Property China
Tel: (8621) 6237 1112
Senior Communications Manager
Macquarie Banking and Property Group
Tel: (612) 8232 6989
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