Savills Investment Management, the international property investment manager, and China Minsheng Investment Capital Co. Ltd (“CMIC”), a subsidiary company of China Minsheng Investment Corp., Ltd (CMI), China’s first national-level private investment company, have entered into a joint venture agreement to develop and promote a series of funds and investment vehicles to invest in global real estate markets.
The joint venture is the first of its kind between an international real estate investment manager and a private Chinese investment company.
The first major initiative resulting from the joint venture is a new real estate fund, CMISIM European Investment Fund (“The Fund”), in which CMIC is the cornerstone investor with seed capital up to £30 million. The Fund aims to deliver a net return to investors of 15%.
The majority of the seed capital in the Fund will be invested into Savills Investment Management’s Prime London Residential Development Fund II (“PLRDF II”) and the remaining amount will be used to invest in other UK projects. Upon successfully raising capital from other investors from China and internationally, the joint venture will expand its investment into other markets in Europe and further afield.
Launched in 2014, PLRDF II capitalises on the fundamental shortage of housing stock in London by targeting mid-market residential developments in select locations where the supply / demand imbalance is most acute. PLRDF II enables investors to share in the development profits by investing alongside proven developers in off-market transactions. CMIC will invest an additional £20 million as a Limited Partner directly into PLRDF II.
Justin O’Connor, Chief Executive Officer of Savills Investment Management, comments, “We are delighted to have formed this ground-breaking joint venture with CMIC, and together we look forward to generating many highly attractive real estate investment opportunities in the years to come. CMIC’s decision to partner with SIM underlines the strength of our reputation as a leading international real estate investment manager. Our inaugural fund, CMISIM European Investment Fund, is well-placed to deliver superior risk adjusted returns by offering immediate exposure to PLRDF II and other fund and projects managed by SIM.”
Terry Liu, Chief Executive Officer of China Minsheng Investment Capital, comments, “Our joint venture partnership with Savills Investment Management represents an important step in establishing a global real estate investment platform. Given the strategic importance of London and its buoyant real estate market, we are pleased that this will be the initial investment focus of our partnership. Our strategy is to build a globally diversified portfolio and in SIM we have the ideal partner to make this happen.”
