Washington, D.C.-based global private equity firm The Carlyle Group has entered into a strategic cooperation with one of the largest Chinese real estate developers, China Vanke Co,Ltd., to acquire nine commercial properties from Vanke, according to an official announcement.
There is no disclosure on how big the deal could be, but previous media reports put the value of the transaction at between US$997 million US$1.6 billion.
The two parties, through the signing of a memorandum of understanding (MOU), will establish a joint asset platform company to make the acquisitions, with Carlyle taking an 80% stake of the joint firm, and Vanke taking the rest.
The asset platform company is expected to hold the nine unnamed Chinese commercial properties for a long period of time, until the assets can be securitized in future, perhaps in the form of a Real Estate Investment Trust (REIT).
The two parties also plan to establish a commercial management company to take charge of the leasing and operation management of the nine commercial properties.
The tie-up with Carlyle will likely raise Vanke’s asset turnover and improve its liquidity, says a report by Fitch Ratings.