China is investing Big in UK property / Real Estate North & South > all you need to know

China Vanke is to by buy a stake of 20% in the £750m The Stage development in Shoreditch, EC2.

The largest real estate company in China, with $79.2bn (£51.2bn) of assets under management, is to become a joint venture partner with Cain Hoy Enterprises, McCourt Global, Galliard Homes and Investec Structured Property Finance.

CEO Of Vanke Group Wang Shi, Chairman & Founder, China Vanke Co, People's Republic of China

Galliard Homes, the leading London focused residential developer, has established a joint venture with Cain Hoy Enterprises (‘Cain Hoy’), the private investment company, to invest up to £225 million in new residential projects over the next three years; the focus will be on regeneration projects in the South East.

Cain Hoy and Galliard Homes will contribute £225 million into a new 50:50 joint venture, to be known as Galliard Developments Ltd. Deutsche Bank, the global banking and financial services company, is making available a 3-year corporate facility to Galliard Holdings Ltd that will
be used towards the Galliard share of the equity funding for the new joint
venture.

Galliard Homes - A History of Regeneration

These arrangements will facilitate the construction of projects with a combined Gross Development Value (GDV) in excess of £1 billion and will be in addition to the 4,000 units being constructed by Galliard Homes at present.

The first project to be funded through the new venture will be 2 Millharbour, a joint venture with Frogmore near Canary Wharf. Contracts have already been exchanged for the purchase of this site which has planning potential for up to 900 luxury apartments together with ancillary facilities.

Stephen Conway, Chairman & Chief Executive of Galliard Homes said:
“The market in and around London remains robust and is underpinned by a shortage of properties, strong economy and international desirability. This significant investment will enable Galliard to expand our pipeline of new developments over the next three years in a focused and opportunistic
manner, building on the success of its schemes to date.”

Jonathan Goldstein, Cain Hoy’s Head of European Investments, said: “Galliard’s proven ability to deliver popular, high quality, profitable developments, particularly as part of regeneration projects, makes it an attractive target for investment and a valuable joint-venture partner. Our property investment expertise and financial firepower, combined with their strong development team, put us in an exceptionally strong position to deliver
solid returns.”

[Cain Hoy Enterprises is a private equity firm specializing in real estate, retail, media and entertainment investments. It seeks to invest globally. Cain Hoy Enterprises is based in Greenwich, Connecticut with additional offices in London and New York, New York.]

Founded in 1992, Galliard Homes is currently London’s largest privately owned residential developer and the second largest house builder in the capital. Galliard Homes specialises in regeneration projects and typically builds and sells new homes located on brownfield land, priced from £250,000
up to £1 million. Over the last three years, the company has also successfully expanded into the ultra-prime sector of the housing market undertaking projects in London’s West End and Whitehall with units priced up to £25 million.

Galliard Homes is known for its success in selling homes off plan before construction begins, and currently has over £1.1 billion worth of forward sales. Projects include Great Scotland Yard, a 5-star hotel in Whitehall; Baltimore Tower, a residential skyscraper in Canary Wharf; and The Chilterns, a luxury residential project in Marylebone; the latter two are joint ventures with Frogmore.

Vanke established a London office at the start of the year, hiring Lily Lin from UBS as its UK managing director. It has been targeting mixed-use and residential development opportunities in central London of around £40m.

The 2.3-acre site of The Stage was bought by Cain Hoy and Galliard in March for close to £150m from the Bard family. Vanke is understood to have paid more than £30m for its stake.

The joint venture partners are understood to have previously held separate discussions with Oxford Properties and Tishman Speyer on a deal that would have seen them forward-purchase the 257,252 sq ft of offices at the scheme. However, a deal with Vanke across the whole project ultimately proved more appealing.

The deal will allow the consortium to utilise Vanke’s development expertise and experience as well as provide valuable avenues to other Asian capital and occupiers.

Vanke is the fourth-largest owner of real estate in the world and last year built 150,000 homes in mainland China – more than were completed in the whole of the UK.

Prior to the Vanke deal, Cain Hoy and McCourt Global jointly owned 80% of the scheme, with Galliard owning 20%. Investec also owns a negligible equity position and is a major funder of the scheme, having provided a £100m loan to the partners in June.

The stakeholders have all sold 20% of their respective positions to Vanke, which will fund its portion of the cost of building out The Stage.

The Stage will comprise 413 luxury Shoreditch apartments within a showcase 37-storey tower, over 250,000 sq. ft. of office, retail and leisure space, whilst also incorporating a world-class heritage centre – Shakespeare's Curtain Theatre, providing a unique international identity for investors, residents and occupiers.

Northern Investment >

Chinese firm to invest in UK housing projects

A Chinese firm plans to provide investment to launch three housing projects in northern England, the UK Treasury said on Wednesday as Chancellor George Osborne toured China to boost business ties.

Hualing Industry and Trade Group, based in China's Xinjiang region, intends to invest 60 million pounds to kick off the three projects in Manchester, Leeds and Sheffield which will have a final gross value of 1.2 billion pounds. Xinjiang Hualing Industry amp; Trade (Group) Co., Ltd. provides distribution and trading services for building material. The company was founded in 1988.

The ministry said the projects, led by Britain's Scarborough Group [SG], are expected to deliver 10,000 new homes, part of the government's efforts to spur development in northern England which has lagged growth in London and the Southeast .

The SG was Founded by Kevin McCabe in 1980, Scarborough Group International has grown from a UK based real estate developer and investor into a global organisation, focussing predominantly on real estate with other past and present business interests in Europe, North America, Myanmar, Australia, Hong Kong, India, China and the United Kingdom.Scarborough is now in its fourth decade of business, having developed into a global group with a diverse portfolio. We have a comprehensive investment portfolio which encompasses all aspects of real estate, interests in leisure -most notably a 50% stake inSheffield United Football Club - as well as additional investments in a number of other sectors.

In Sheffield, Hualing is investing in the city’s Digital Campus, a £40m commercial and office development, with 130,000 sqft of office space.

“For Scarborough, this is the latest chapter in a long history in China, spanning over 13 years, during which time we have established strong relationships with local partners as the foundation for significant investments in China and the Far East.

“As a family business with its roots in the north of England, we are now very proud to bring our partners in China to the UK.”Scarborough chairman Kevin McCabe

Last month, Legal & General said it was investing £162m in the Leeds scheme Thorpe Park – a £400m regeneration project.

The UK insurer, which plans to invest £1.5bn in UK regeneration projects, took a 50% stake in Thorpe Park Leeds, a 200-acre mixed-use business development site.

Scarborough Group has planning consent to build 60,000 sq ft of offices and 300 homes during a second, five-year development phase on the site.

L&G’s deal was the first since the start of the UK government’s Regeneration Investment Organisation partnership, launched earlier this year.

In Manchester, Hualing is investing in Scarborough Group’s Middlewood Locks, a £730m residential and commercial project.

Last year, two Asian property developers committed to two Scarborough Group residential schemes worth £600m in Manchester, their first investments in the UK.

Hong Kong-based developer Top Spring International and Singapore’s Metro Holdings took equal stakes in the joint venture.

Kevin McCabe Founder of Scarborogh Group on 125th celebrations of Sheffield United FC

Osborne said he was aiming to make China the second-biggest trading partner of Britain by 2025, compared with its number-six ranking now.

Earlier this week, Britain and China announced initiatives including an expanded currency swap agreement, Chinese investment in British nuclear power and a study for a scheme to connect the London and Shanghai stock markets.

Osborne also announced 10 million pounds in extra funding to enable thousands more British schoolchildren to learn Mandarin by 2020.There is an enormous opportunity.

"Next month the president of China will come on a state visit to Britain, the first such visit by a Chinese president in a decade.

And he will travel to London, but he will travel beyond London as well.

It’s an opportunity to showcase the best of Britain and to showcase our relationship with China, with different countries with different histories. We have different political systems, we know that.

But we’re also two countries which I think have done more to shape the culture of the world than perhaps any other two nations on earth.

So let’s work together, let’s invest again and let’s help create jobs and prosperity in each other’s countries and in particular, work with us to make a reality of the Northern powerhouse."Rt Honourable George Osborne MP Chancellor of the Exchequer