New China Land Fund offers $400 million investment opportunity
Tuesday 15th, August 2006 – Author – Al Bawaba
Oman based Amwal Investment SAOC, in conjunction with the Wanyuan Group, China, provided Bahrain investors with a highly lucrative investment opportunity in a US$400 million real estate development fund in the People’s Republic of China.
Wanyuan New China Land Fund (Fund) is a Cayman Islands unit trust which will be managed by NCL Fund Management Ltd. (NCL), a Cayman Islands corporation. The Bank of Bermuda, a wholly-owned subsidiary of HSBC is the Fund trustee. Guests learned about investment opportunities in what is both the world’s fastest growing economy and most rapidly developing major real estate market. With closing targeted for September 2006, the fund aims to post net investor returns of 15+% per year during a 5-year investment life, however; past experience of the principals, and current market conditions, indicates performance in excess of this target. Minimum institutional investor commitment is $5 million, while individual investor commitment is $1 million with a management fee of 2.5% per annum of invested capital, paid quarterly in advance.
The presentation, which is part of a GCC-wide road-show, was given by Mr. Shumin Zhu, Chairman, Wanyuan group, and Chairman NCL Fund Management Ltd. Also present were Jasser Al Aulaqi, CEO of Amwal Investment, Andrew Oksner, President, NCL Fund Management Ltd., “We are focusing on second-tier cities where demand is high and competition minimal.
Millions of people are migrating from the countryside to China’s cities each year in search of jobs: this migration to cities translates into increased housing demand [1]. Furthermore, economic growth among the middle class is increasing, and an astounding 1700% growth is projected by 2010 for consumers who can afford luxury goods [2], (explained Mr. Zhu.) In addition, 1.1 billion square meters of old homes are in need of renovation or replacement [3], and foreign investment, which represents 5% of the market, is steadily increasing [4], particularly with the influx of multinationals expanding use of China for Asia-Pacific headquarters.
Therefore it is not surprising that real estate is the preferred investment category, Mr. Zhu added.
The Fund will implement two real estate investment strategies to maximize profit; develop primarily residential, retail, and land master-use development in provincial capitals and major metropolitan areas to sell units and land parcels to end-users and investors; and acquire partially complete or existing projects from distressed owners to leverage from cost and time advantages over competition.
A naturally discerning businessman in identifying the most profitable real estate investment opportunities, Mr. Zhu has successfully managed and supervised projects with support from key Wanyuan staff including: Wanbang Metropolitan Garden, Pudong, Shanghai, a 143,000 sq. m residential and 70,000 sq. m retail project; Zhudao Garden Guangzhou City, Guangzhou Province, a 600,000 sq. m office/retail, 400,000 sq. m residential project; Zhongda Mansion Shenzhen City, Guangzhou Province, an 80,000 sq. m residential project; Fuhau Garden Changchun City, Jilin Province, a 300,000 sq. m residential project; and Tianzi Garden Beijing, a 65,000 sq. m residential project.
The road-show began in Oman, and took place in Dubai, Kuwait and Qatar and will also take place in Bahrain.
