Chinese investments in Real Estate worldwide. Cindat example.

We took the opportunity of his visit to France to discuss with Mr. Allan HE, senior partner at Cindat (www.cindat.com), about Chinese investments in Real Estate worldwide.

Broome-SohoP. CAPUTO: Allan, can you introduce your company, Cindat, in a few words.

A.HE: Cindat Capital Management Ltd. is an independent private equity platform specialized in real estate, established to guide and safeguard Chinese capital in their overseas real estate investments, as well as to advise and help manage overseas capital in their investments in China. We have offices in Beijing (Headquarters), Shanghai, New York, Los Angeles and London.

P. CAPUTO: Beyond the common belief that China is buying the entire world, Chinese investment in Real Estate has not really surfaced in France.

A. HE: Cindat has not invested in France so far. I am sure that we’ll come back to this later. To date, Cindat has invested more than $1.5 billion of equity capital in more than $6.5 billion worth of real estate assets in global gateway cities, such as New York, Chicago and London. 

P. CAPUTO: That’s pretty different from Chinese public investment in construction which benefits mainly to Africa.

A. HE: We are a private platform; our only objective is to maximize return on investment.

P. CAPUTO: The relationship between China and Trump administration looks tense. Does it affect your present and future investments in US?

A.HE: We are certainly cautions on that front but so far there is no substantive impact to our investments; our business in US is as usual. The new administration’s recent tax reform did create adverse outcome to our return calculation and we are still working on to minimize the impact.

P. CAPUTO: You also mentioned UK as an important recipient of your investments. Are you afraid of the consequences of Brexit?

A.HE:  There are also advantages to a devalued pound. We’re sector focused and try to avoid those areas with more impact from Brexit.

P. CAPUTO: I am surprised that you are not targeting Canada …. It’s in North America, it has a healthy and stable economy, a mature real estate market, and many Chinese immigrated there!

A. HE: Canada has small market size and lack of liquidity but we’re open to any investment opportunities there.

P. CAPUTO: What about France?

A. HE: We need to understand more about the market and EU substance. Hopefully we will come in later soon.

P. CAPUTO: Tell us more about the profile of the projects that you target.

A. HE: Our investments overseas cover a wide range of asset types, including residential developments, office properties, hotels and seniors housing.

We target mature Projects with low pre-development risks, and value-add acquisitions with significant upside.

We invest in markets that have strong demand and yet somewhat restricted supply. Investments in quality projects in these markets secure stable and attractive cash flowing returns.

Last but not least, we always partner with high quality emerging mid-sized local developers who have strong knowledge of the local market. They also contribute sizable equity investment to align interest with Cindat investors.

P. CAPUTO: Can you give us a few examples of current projects?

A. HE:

  • United States,Welltower Senior Care Portfolio

The $930 million transaction is a joint venture portfolio investment between Cindat and Welltower Inc. (NYSE: HCN), the largest Healthcare REIT in the United States. The portfolio consists of 39 existing high-quality senior care facilities located in 11 states along the eastern and western coastal regions of the United States.

  • New York City 565 Broome Street

This SoHo development is world-renowned architect Renzo Piano’s first residential project in New York City. Its twin-tower design will provide a living experience that is unique in New York.

  • Chicago, 311 S. Wacker Drive

This investment was an acquisition of an existing Class A office building. The building is the 7th tallest in Chicago and is located right next to the famous Sears (now changed to “Willis”) Tower – the tallest in Chicago. The low acquisition price and the subsequent value-add improvement actions taken by our local partner have generated superior current cash returns as well as rapid value appreciation.

  • United Kingdom,Delta Hotel Portfolio

Cindat teamed up with London-based investment management company Aprirose to acquire the UK hospitality chain – Q Hotels. The purchase of the chain includes 26 three and four-star spa hotels, golf resorts, and luxury hotels in major cities such as Leeds, Manchester, Glasgow, and other popular regional leisure destinations.

  • London, 60 Curzon Street

Mayfair is one of the most prestigious and expensive areas in London. The residential project is surrounded by Hyde and Green Parks, Grosvenor and Berkley Squares and Buckingham Palace. Mayfair is under strict historic preservation requirements, and this project is one of the very few approved as a new development. The location, the design, and the unmatched onsite amenities (spa, pool, underground parking, ground floor restaurant, etc.) will make this residential project one of the most sought after once it is brought to the market.

P. CAPUTO: What about your long term objective?

A. HE:  Cindat is committed to becoming the world’s leading private equity platform for Chinese capital in its overseas real estate investment, as well as for international capital’s inbound investment in China. 

November 2018

Pascal CAPUTO

DI Consulting

 

Allan HE

Senior partner

Cindat capital Management

Responsible for Residential, Healthcare and Senior Living investment

www.cindat.com

Allan HE

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