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China Vanke is aggressively expanding beyond its core residential property business and speeding up investments in the retail, office and logistics sectors amid a slowdown in the country's housing market. Photo: Reuters

New | China Vanke forms venture with Carlyle

China Vanke

China Vanke and United States buyout firm Carlyle Group have signed a non-legally binding memorandum of understanding to set up a joint venture that will acquire and manage nine of the Chinese developer's commercial property projects until these assets are securitised in the future.

China’s biggest developer announced late on Thursday that it would invest 20 per cent in the asset platform joint venture while Carlyle would have 80 per cent.

Vanke is aggressively expanding beyond its core residential property business and speeding up investments in the retail, office and logistics sectors as it predicts growth in China’s housing market will slow in the next decade, with profit margin narrowing.

The company set up a commercial property management division in January last year and owned almost 20 million sq metres of commercial properties as well as a combined floor space of several million sq metres in offices, hotels and serviced apartments, it said in June while announcing a strategic partnership with internet search giant Baidu.

To cut the financial burden of its expansion plans, Vanke’s senior executives have said the company intends to team up with strategic investors, a strategy it has borrowed from the playbooks of foreign partners, including Tishman Speyer, during its overseas foray in the US.

Vanke said in a statement to the Hong Kong stock exchange that it would also establish another firm with Carlyle to take charge of the leasing and operations management of the nine commercial properties.

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