Property giant CapitaLand has set up its first value housing private equity (PE) fund called CapitaLand China Value Housing Fund (CCVHF), which will mainly invest in China projects, reported The Business Times.
According to CapitaLand Financial CEO Wen Khai Meng, the fund provides an opportunity for investors “to gain exposure to the value housing segment in China”.
CapitaLand said that the fund successfully closed at US$215 million (S$262.7 million). CapitaValue Homes, the firm’s subsidiary, holds 58.6 percent interest or US$126 million (S$154 million), while remaining stakes are held by corporate and institutional investors. It has a fund life of five years.
“The value housing segment in China continues to see strong underlying demand driven by rapid urbanisation, a growing middle class and escalating home prices,” said Chen Lian Pang, CEO of CapitaValue Homes.
Meanwhile, two value housing developments in China under construction – The Floravale in Shanghai and The Rivervale in Guangzhou – will be injected as seed investments into the fund. The projects could generate more than 3,000 homes mainly for mass market home buyers in China.
“China is currently 51 percent urbanised and seven million new households are expected to form every year. Value housing will meet the needs and affordability of many young and first-time home buyers,” Chen said.
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