(Yicai Global) May 15 -- GIC Private Ltd., one of Singapore's sovereign wealth funds, and Nova Property Investment Co., a leading Chinese property investment and asset management firm, have agreed to establish a rental apartment platform in China where the government seeks to foster the leasing market's growth.
The platform will invest in quality long-term projects in central locations of China's first-tier cities and has CNY4.3 billion (USD676 million) in initial funds, Singapore's Strait Times newspaper reported yesterday. Formerly known as Government of Singapore Investment Corp., GIC will also take a minority stake in Shanghai-based Nova.
Property firms such as Nova and Chinese internet giants Alibaba Group Holding Ltd., Tencent Holdings Ltd. and JD.Com Inc. are banking on a huge expansion in the home rental market as the Chinese government extends support to the sector in a bid to curb property prices and encourage alternative lodgings. The housing minister said in March that the government would bring in new measures to underpin the market.
GIC was "attracted by the promising outlook of China's fast-growing rental apartment sector," said Lee Kok Sun, chief investment officer at the fund's real estate division.
"There is a large and growing population of renters within our target income group, with a limited supply of quality institutionally-owned and professionally-managed projects," he said. "Our partnership with Nova is an important component of our broader strategy to invest in this emerging sector in China."
Nova was co-founded by one of the world's leading private equity groups, Warburg Pincus LLC, and Chinese entrepreneur Wang Qian. It seeks to acquire quality property assets and convert them into long-term rental apartments and commercial spaces.
"Our vision is to become a leading investment and asset management platform in the urban renewal and rental apartment sector, to deliver the best-in-class investment, renovation and operation services," said Wang, chairman and chief executive of Nova.
"Warburg Pincus is a firm believer in the long-term apartment rental industry driven by continued urbanization and demand for high-quality rental properties in China," added Joseph Gagnon, managing director and head of Asia real estate at the private equity group.
Editor: Mevlut Katik