Gaw Capital ready to sell Beijing complex, sources say, in what would be the biggest property deal in China’s capital city this year
- Hong Kong’s Gaw to net handsome profit after upgrading property
- Deal underscores that prime areas of Beijing are still hot trophies for investors
Hong Kong-based Gaw Capital Partners is ready to sell a Beijing landmark complex to a Chinese firm backed by property tycoon Zuo Hui, two sources said, pocketing a handsome profit after acquiring the asset just over four years ago from Hong Kong mogul Richard Li Tzar-kai and upgrading it.
Beijing Yuanjing Mingde Management & Consulting Co., a Chinese company backed by Zuo, will purchase Pacific Century Place, a complex in Beijing’s ritzy Sanlitun area, with a price of about 10.5 billion yuan (US$1.5 billion), according to one of the sources familiar with the matter. That would be an increase of about 60 per cent over the original purchase price, without counting the costs of the substantial upgrade.
The sales agreement – which, once inked in, would be by far the biggest property deal in Beijing this year – shows that despite a slowing economy and tight funding conditions, properties located in prime areas of the nation’s capital city of Beijing remain hotly sought-after trophy assets for international and domestic investors.
It also underscores the financial muscle of Chinese home-grown companies: Zuo is the chairman of Beijing Homelink Real Estate Brokerage Co, China’s biggest realtor, which controls a matrix of property investment and management companies, including Ziroom, China’s largest rental flat operator, and Homelink, the country’s largest property agency. Both Homelink and Ziroom have raised funding from high-profile companies, such as China’s Tencent and US private equity firm Walburg Pincus, and have ambitious IPO plans.
The sale of Pacific Century Place comes as offshore investors are reaping megadeals in China’s commercial property sector, taking advantage of Chinese investors’ weakness in financing and strict scrutiny. Just last week, Gaw said it had partnered with the Vancouver-based QuadReal Property Group to acquire a 25-storey grade A office building in central Shanghai, a deal estimated to valued at 3 billion yuan.