Warburg Pincus bets big on Chinese car park operator Sunsea
It estimated parking fees collected in China’s first- and second-tier cities will grow by an average 13 per cent during 2016-2021, to US$118 billion
Warburg Pincus, one of the largest investors in China’s commercial and industrial real estate, has found its next pot of gold amid the country’s property market, as residential assets succumb to a year-long government campaign to cool prices.
The partnership would transfer the operational rights of 300,000 parking spaces at Red Star Macalline’s malls in China to Sunsea, while the parking operator would use the proceeds to buy the rights to manage another 35,000 to 40,000 spaces, according to a statement.
“The number of China’s private passenger cars is growing at an annual rate of 10 per cent and the country has become the largest market in the world. But the number of parking spaces lags far behind the demand,” said Joseph Gagnon, managing director and head of Asia real estate at Warburg Pincus. “Beijing’s parking spaces to car ratio is just one third of Hong Kong’s.”
According to a Bain & Company report, every car in Beijing and Shenzhen has 0.4 registered parking spaces, compared to 1.3 in Manhattan and 2.5 in central and western US.
The number of China’s private passenger cars is growing at an annual rate of 10 per cent and the country has become the largest market in the world. But the number of parking spaces lags far behind the demand. Beijing’s parking spaces to car ratio is just one third of Hong Kong’s
Other oft-cited data from China’s National Development and Reform Commission estimates there is a 50 million gap in the number of spaces in China. In Beijing alone, the gap was 3.55 million by 2016.