GE Real Estate Enters China Market with $20M Investment

STAMFORD, CT-GE Real Estate will invest $20 million in a fund that will target residential real estate properties in economically developed regions in China. The deal is the first investment by the company in China.

GE Real Estate will invest the funds in the newly formed Citic Capital Vanke China Property Development Fund. The fund, along with China Vanke Co. Ltd., a publicly-traded real estate development firm in China, plan to invest up to $150 million in residential real estate assets in what GE Real Estate officials term "economically developed regions in China." Among the targeted areas identified by GE Real Estate are the Pearl River Delta, the Yangtze River Delta and the Pan Bohai regions as well as other inland cities.

The fund will be managed by Citic Capital, a member of the Citic Group, a China-based transnational financial services conglomerate. China Vanke Co., Ltd. will be the exclusive development manager for all fund investments. A Citic group entity and China Vanke Co., Ltd. will also make a substantial capital commitment to the fund, GE Real Estate officials say.

Mark Hutchinson, president, GE Real Estate Asia-Pacific, adds, "Investing in residential properties is the right entry strategy, because it is the most robust and liquid commercial real estate segment in China. The value of this partnership exists in learning this market and establishing a confident presence in multiple business centers throughout China. Also, as the sole strategic investor we have a right to further co-investment, giving us the potential to scale up the portfolio managed by this partnership significantly."

Pralle continues that GE Real Estate will also be exploring investment opportunities in other asset types throughout China, including retail, hotel, office and industrial properties. "We have a pipeline of deals totaling several hundred million dollars which we will review as we move forward. We see great potential in China."