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China’s Greenland to list REIT in Singapore

/ The Edge Property |

March 22, 2016 9:00 AM SGT

On March 11, China’s biggest state-owned developer Greenland Group announced that it had signed a deal with Singapore-based investment company Amare Investment Management Group to the tune of $5 billion. As part of the deal, Greenland will inject 20 hotels in China into Amare, which has been set up as a special purpose vehicle to hold the assets.

“This is a securitisation deal, and it’s currently a private real estate investment trust,” says David Su, group chairman of Singapore-based Glory Fund Management Group and Amare. “Whether it will be a public-listed REIT will depend on the regulatory approval.”

The first phase of assets to be injected are Greenland’s hotel properties in 15 cities across China, such as Shanghai, Nanjing, Jinan, Xi’an, Zhengzhou and Yangzhou. The next phase will include Greenland’s assets in international markets as well as third-party assets, says Su.

Shanghai-based Greenland has invested more than $25.6 billion outside of China. It is currently engaged in over 300 projects covering an area of 800 million sq ft across 100 cities around the world. It has invested US$5 billion ($6.9 billion) in New York and Los Angeles in developments totalling seven million sq ft.

David Su (left) of Glory Fund Management and Zhang Yu Liang of Greenland

In Australia, Greenland is developing Greenland Centre in Sydney, which is part of its $1 billion investment in the country. When completed in 2017, the 235-metre-tall Greenland Centre will be the tallest residential tower in Sydney. Other projects in the pipeline in Australia include those in Melbourne.

In London, Greenland is involved in the development of a £1.2 billion ($2.3 billion) luxury apartment scheme on the former Ram Brewery site in Wandsworth. It is also building the tallest residential tower in the western hemisphere in Canary Wharf.

In Malaysia, Greenland has invested US$3.2 billion into two mega schemes in Iskandar Malaysia, namely Greenland Tebrau and Greenland Danga Bay.

According to Greenland chairman Zhang Yu Liang, there are plans to acquire assets in Singapore as well. The group is interested in acquiring completed commercial assets such as office buildings, shopping malls and hotels. It is also open to acquiring development sites, he says.

Founded in 1992, Greenland has total assets of over $100 billion. It is currently listed on Hong Kong’s H-share market and the Shanghai Stock Exchange.

The securitisation deal with Greenland has been in the works for over a year, says Su of Glory Fund Management. The reason it is considering a REIT listing in Singapore instead of Hong Kong is because Singapore’s REIT market, at US$46 billion, is double that of Hong Kong. “Singapore also has a better legal and tax framework to support trusts,” he adds.

This article appeared in the City & Country of Issue 720 (March 21, 2016) of The Edge Singapore.

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