Citic Capital Holdings has announced the first closing of its fourth fund, which aims to raise US$600 million to invest in the mainland's retail properties.
The fund completed its first closing at US$225 million on November 5, attracting institutional investors from the United States, Europe and Asia, the company said.
The fund will focus on retail property and mixed-use development with substantial retail portions in the mainland's second and third-tier cities, which offer a high potential for economic growth driven by urbanisation.
Stanley Ching, senior managing director and head of Citic Capital's property division, said he believed there were tremendous opportunities in second and third-tier cities, especially when infrastructure and transportation networks in these cities improve in the coming years.
Domestic consumption will play a more important role in China's economic growth and the retail industry will benefit from the 12th five-year plan, he said.
Citic Capital's property division has invested in 18 projects in mainland cities, with a total asset value of more than US$3 billion.
Ching said the fund would seek investment opportunities in retail properties through acquisition and co-development with local partners.
One of the fourth fund's seed investments is ID Mall, a nearly completed upmarket shopping mall in Changsha, capital of Hunan province.
ID Mall has a retail gross floor area of approximately 86,000 square metres and is located in the prime area of Changsha.
Joseph Tang, director of Townsend Group, a global property investment manager, which is the cornerstone investor in the fourth fund, said: 'The China market is definitely what we have eyes for, especially when our clients are getting more sophisticated with their investment in emerging markets.'