Ivanhoé Cambridge, APG Collaborate in Shanghai

The international real estate community remains more than a little keen on China.

By Barbra Murray, Contributing Editor

Rita-Rose Gagne, Ivanhoe Cambridge
Rita-Rose Gagne, Ivanhoe Cambridge

The international real estate community remains more than a little keen on China, and a recent billion-dollar move by Canadian real estate company Ivanhoé Cambridge and Dutch pension asset manager APG Asset Management N.V. serves as evidence. The two entities just announced their investment in Chongbang, a Shanghai-based developer of retail-anchored mixed-use properties, through a $920 million capital raising.

Chongbang was formed in 2003 and today the company boasts a 4.6 million-square-foot portfolio of retail and commercial offerings in Shanghai–but that’s just the half of it. Chongbang presently has an additional 4.5 million square feet in projects under development. Ivanhoé and APG aren’t the first on the global investment scene to take note; GIC, Singapore’s sovereign wealth fund, is an existing shareholder.

Yes, there’s something about China, and Shanghai, in particular. The city ranks 14 on the top 30 global real estate investment markets, sandwiched between Philadelphia and Houston, according to PwC and the Urban Land Institute’s 2015 Emerging Trends in Real Estate report.

“While our investment in Chongbang denotes our confidence in China’s economic growth, we particularly believe in Shanghai’s actual dynamic and future potential. Ongoing urbanization trends are favorable to increasing domestic consumption and the service economy,” Rita-Rose Gagné, executive vice president, Growth Markets, Ivanhoé Cambridge told Commercial Property Executive.

As noted in the PwC/ULI report, there are numerous reasons why Shanghai is a magnet for the international investment community, chief among them the fact that it is one of several key gateway cities in Asia. Additionally, Shanghai has a substantial pool of investment-grade product, greater transparency than other domestic cities and it remains a preferred location for companies wanting to establish offices in China.

With Ivanhoé Cambridge and APG’s participation, Chongbang is well-positioned to continue to capitalize on demand for lifestyle-based retail offerings in the area.

“Chongbang sees enormous growth opportunities in the retail-anchored mixed-use sector in Shanghai and its neighbouring cities, both in terms of development of new projects and enhancement of old ones, as the region steps up its urban regeneration programmes,” Henry Cheng, CEO of Chongbang, said in a prepared statement.