China Everbright, the Hong Kong-listed investment arm of financial conglomerate China Everbright Group, has acquired a 51 per cent stake in Alam Group, a property private equity firm, for US$850,000 despite the slowing real estate market in the mainland.
'Many real estate enterprises are facing various financial challenges because of credit tightening which provides acquisition opportunities for the capital strong companies like us,' said Chen Shuang, an executive director and chief executive of China Everbright.
Some foreign firms offloaded their mainland assets mainly because their parent companies were facing a liquidity crunch, but strong demand and fundamentals in the country remained unchanged, Mr Chen said.
He said it would take two or three years for the property market to regain its momentum, and it was time to look for bargains to ride a boom later on.
Alam's total equity investment amounted to US$110 million. Mr Chen said it hoped to increase the size to US$250 million before the middle of next year by investing in real estate projects, private equity, property financing, and non-performing assets.
'We will focus on the cities in eastern China, mainly in Kunshan, Wuxi and Nantong in Jiangsu province,' Mr Chen said.
The main targets were the mid to top-tier residential projects or developers, he said.
China Everbright rose 50 HK cents or 6.41 per cent yesterday to close at HK$8.30, compared with a 5.28 per cent gain in the Hang Seng Index.