Vanke and BYD set up tech and logistics fund

Business | Avery Chen and Reuters 8 Oct 2019

Chinese property developer China Vanke (2202) announced a partnership with electric-carmaker maker BYD (1211) to set up a fund of up to 1.1 billion yuan (HK$1.21 billion) to invest in technology and logistics-related funds.

Chengdu Vanke Real Estate, Vanke's subsidiary, plans to establish an investment fund with partners including BYD and an IDG Capital-backed wealth management company.

Chengdu Vanke's registered capital amounted 500 million yuan while BYD's registered capital totaled 600 million yuan, according to the two companies' announcements yesterday.

The private equity fund will invest in technology, media, telecommunication, health care, consumption, entertainment and advanced manufacturing, clean energy industries and related funds.

Vanke, China's second-largest developer by sales, had formed a strategic partnership with BYD in 2016 to promote a "railway plus property" model.

Shenzhen Metro Group had acquired more shares in China Vanke for 29.2 billion yuan in 2017, making it the largest shareholder in the developer.

"The stake purchase will take advantage of Shenzhen Metro and Vanke's strengths in transportation and property development services," Shenzhen Metro said in a statement at the time.

However, Shenzhen Metro's stake in Vanke fell to 28.69 percent from 29.38 percent after it sold HK$7.81 billion worth of new H-shares to raise capital to repay its outstanding overseas debt financing earlier this year.

Vanke's contracted sales rose 15.1 percent year-on-year to 44.13 billion yuan in August while the contracted sales area grew 7.77 percent to 2.77 million square meters.

For the first eight months of this year, Vanke achieved an accumulated contracted sales area of 27.41 million sq. m - a 5.44 percent increase - and a contracted sales amount of 426.32 billion yuan, up 9.84 percent year-on-year.

However, China's new home prices grew at their weakest pace.

Average new home prices in China's 70 major cities rose 8.8 percent in August from a year earlier as a cooling economy and existing curbs on speculative buying put a dent on overall demand.

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