30/12/2019 - InfraRed NF, a leading Greater China real estate investment manager, is pleased to announce a US$45.9 million loan to Heneng Group (“Heneng”) to finance the development of a plot of residential land in Changsha. This is the second loan that InfraRed NF has extended to Heneng and brings the total loan amount extended by InfraRed NF and its partners to Heneng to over US$105 million. Metro Holdings Limited, a Singapore listed company, co-invested with InfraRed NF on the transaction.
Heneng is a residential developer headquartered in Chengdu with presence across multiple mega-hubs in China. The group has annual contracted sales in 2019 in excess of US$950 million, a land bank of over 6 million square metres and approximately two thousand employees.
The loan is secured on a plot of residential land in Changsha with credit enhancement from a residential development in Ningbo. The land in Changsha is situated in close proximity to the city’s second CBD with direct access to a planned 76,000 square metres urban park area and is a 5-minute walk to the metro station. The project, similar to the first partnership project in Chengdu, includes development of a new kindergarten. The site in Ningbo has already started presales and is also close to a metro station. The combined portfolio is expected to generate over US$500 million in contracted sales on over 300,000 square metres of gross floor area.
This loan marks InfraRed NF’s third investment in the city of Changsha, the provincial capital of Hunan, which has a population of around 70 million people, and is a major economic hub for central China. This is in line with its strategy of investing in China’s key mega-hubs, which benefit from higher than national average GDP per capita, population growth rates, and infrastructure investment. This loan also provides evidence of InfraRed NF’s ability to secure quality deal flow through long-term, existing partnerships with national developers.
Grant Chien, Head of Special Situations Financing at InfraRed NF, commented,
“By aligning interests with our investors, developers and society we have provided a financing solution to a repeat partner in a mega-hub we know well. The creation of an urban park and kindergarten provide competitive differentiation for the project and align with our focus on ESG. InfraRed NF’s loan security portfolio has grown to over $3 billion in gross development value across 7 cities in Greater China. We have an excellent pipeline and expect to continue this momentum into next year.”
Commenting on the transaction, Stuart Jackson, the CEO of InfraRed NF added,
“This financing further validates our business model of focusing on higher barrier-to-entry transactions which require comprehensive property level underwriting and deep asset management expertise. China’s long-term deleveraging and ongoing trade war volatility continue to provide us with attractive risk-adjusted opportunities.”
Tulchan Communications | +65 6222 3765 | InfraRedNF@tulchangroup.com
InfraRed NF is a Hong Kong-based joint venture between InfraRed Capital Partners and Vervain. Established in 2007, InfraRed NF is a leading investor in the Greater China real estate market with a proven track record of delivering superior returns through a combination of mezzanine financing and value-add investing.
InfraRed Capital Partners is a leading global investment manager focused on infrastructure and real estate. It operates worldwide from offices in London, Hong Kong, New York, Seoul and Sydney and has launched 18 funds including two listed on the London Stock Exchange. With over 140 professionals, it manages US$12bn of equity in multiple private and listed funds, primarily for institutional investors across the globe.
Vervain (which includes entities operating under the former name of “Nan Fung China”) is a Hong Kong-based private group of companies established in 2004. Vervain has a diversified real estate business, including property investment, property development, project management, real estate private equity investment as well as other financial and mezzanine financing investment. Vervain’s property portfolio comprises high quality residential, commercial, industrial, serviced apartments and hotel properties in Hong Kong, London, New York, Seoul, Tokyo and Vietnam.