Century Bridge Exits $125M Apartment Development

XIAN, CHINA-Dallas-based Century Bridge Capital has exited the Shanxi Tian Bao apartment complex project here, leaving local venture partner Jia Heng Real Estate in charge. The project of 11 buildings, about 1,200 units, is still under construction.

Century started the $125 million project with Jia in December 2008. Jeff Tucker, a managing director with Century, tells GlobeSt.com the plan had been to exit the project before it was completed. The total equity invested in the project is about $41.4 million, with $19 million invested by Century.

He says families have not yet moved in, but many of the units are preleased. The middle-class families typically lease multifamily units for about 70 years, Tucker says. “When we started, we wanted to follow the growth of the middle class in China in the second-tier cities, where there’s about five million to 10 million residents. We like the organic growth of the second tier, and there’s almost a one-to-one ratio between the growth of disposable income and residential property.”

Cities such as Beijing are considered in the first tier, he says. The first tier has more speculative takers of units, whereas most of the customers in the second-tier cities are those who will live in the units, he says.

According to Century data, China’s economy grew at a 12.7% rate in the first quarter of 2010 and finished the entire year up 10.3%. Strong growth is expected for all of China, but especially in the second- and third-tier cities. The country has about 160 cities with more than one million residents, and more than 20 that can be considered in the second tier.

Century focuses primarily on developing in China, and Tucker says the firm will continue to search for more opportunities there. The company completed a second project with local developer Verakin Group on buildings in two districts, more than 1,370 units in three towers in Yuzhong and almost 4,000 units in 14 towers in Banan.