Sam Zell

Equity International, the private equity real estate firm co-founded by Sam Zell and Gary Garrabrant, has acquired its third company in China. Yupei develops, owns and manages industrial, warehousing and logistics properties. Price was $46 million.

Gary Garrabrant

The Chicago-based private equity real estate firm  said it closed the deal with the private Shanghai Yupei Company which currently has five properties in four cities across China, comprising approximately 350,000 square meters. The deal marks Equity International’s third portfolio company in China.

Gary Garrabrant said there was increasing demand for new warehouses in China, driven in part by the obsolence of old stock and a lack of suitable space. He said the growth in domestic consumption would fuel this further adding there were ‘powerful fundamentals’ for the sector.
Source: Private Equity Real Estate

Magnus logo

Magnus International Resources has sold its Huidong project in Sinchaun Province to a Chinese mining group. The exploration license underlying the property has been renewed by the relevant Chinese authorities and 100% of the ownership interest in the company that possesses the license has been transferred to the Chinese group.

Magnus received RMB7 million upon signing.

Magnus retains a 3% NSR (Net Smelter Royalty) on any minerals produced from the property in the future.
Source: MarketWatch

Haoyuan Coal

An indication, perhaps, of the unpopularity of the real estate market is that Shanghai Wanye Enterprises, a China-based company engaged in property development and operation, has announced it will spend RMB225 million to raise its stake in Inner Mongolia-based  Etuokeqi Haoyuan Coal Charring to 45%.

The real estate operator, which held RMB700 million currency capital and RMB190 million operating cash inflow as of the end of June will pay RMB225 million in cash for the acquisition, of which RMB 90 million will be injected to boost Haoyuan Coal’s registered capital.

The acquisition will help Wanye Enterprises diversify its sources of revenue and reduce risks in property development amid the volatile market.

Haoyuan Coal owns three coal mines, which have proven reserve of 37.37 million tonnes.
Source: SteelGuru

Pöyry (spelled that way because it originates from Finland) has expanded its real estate consulting and engineering operations in China by acquiring the entire stock of Shanghai Kang Hong Construction. Based in Shanghai, the company employs 29 experts. Net sales for 2008 are estimated at $1.47 with good growth prospects.

The transaction will not be finalized until the Chinese authorites give approval.

Shanghai Kang Hong Construction is primarily engaged in project management for industrial and commercial real estate development and construction projects. The company also provides a comprehensive range of complementary consulting services, ranging from site search and feasibility analysis services to the management of engineering design.

Worldwide Pöyry’s net sales in 2007 amounted to just over $1 billion and it employs 8,000 experts.
Source: Ad Hoc News

Another indicator that the China property market is impossible to forecast is that the news that China’s spending on factories and real estate grew 25.6% through May led by property development and boosted by reconstruction work after snowstorms in January and February.

Urban fixed-asset investment rose to RMB4.03 trillion ($585 billion) in the first five months from a year earlier after gaining 25.7% in the four months through April.

Spending was more than the combined value of the economies of Thailand, Singapore and New Zealand.

Investment in real-estate development rose 31.9% in the first five months from a year earlier but compare with sending on non- ferrous metals which jumped 41.5% and on coal which surged 47%.

This is a situation which is impossible to call. It will be months before there is a clear picture
Source: Bloomberg