Greenland Hong Kong Holdings Ltd said its $8bn real estate fund co-established with Kuwait Strategic Investor has raised $300m in the first phase, but it has shelved plans to buy a stake in a luxury New York City development from its Kuwait partner.
The Shanghai-based developer, a unit of state-backed developer Greenland Holdings Corp, first announced the deal in April to set up a Silk Road Integrated Real Estate Fund for a term of eight years to “invest in top-tier world class real estate” and properties in major cities.
It would also purchase around a 41 per cent interest in New York’s Park Lane real estate project from Kuwait Strategic Investor, paying for it with the company’s convertible preferred shares.
“After due diligence, we realised the asset was not mature and suggested to shelve the purchase,” Greenland Hong Kong chairman Chen Jun told a news briefing.
The company, diversifying into internet finance to counter thinning margins faced by the real estate industry, will see its financial services unit posting a profit this year – the first for the financial full-year after it was set up, and the profit will double next year, Chen said.
Jack Yang, president of Greenland Financial Services, added Greenland HK plans to spin off the unit after three years.
The unit now manages more than 5bn yuan ($728.1m) in assets and sells mostly bond-type real estate wealth management products.