Carlyle Group LP (CG:US), the world’s second-largest manager of alternative assets, bought a minority stake in two Chinese shopping malls, seeking to tap a retail property boom spurred by rising domestic consumption.
A company advised by Carlyle’s Asia real estate group bought a 49 percent stake in Suzhou In-City Mall and Hangzhou Gudun In-City Mall in eastern China, both owned and operated by SZITIC Commercial Property Co., according to an e-mailed statement. The financial terms were not disclosed.
Carlyle is joining companies such as Hong Kong’s New World Department Store China Ltd. (825) to invest in Chinese malls. The country’s retail sales climbed 12.8 percent in April over a year earlier, recovering from the 12.6 percent pace a month earlier as the Chinese leadership vowed to improve the quality and efficiency of economic growth.
“Rising household disposable income, continuing urbanization, changing demographics and government initiatives to promote domestic consumption will continue to benefit China’s retail sector,” Jason Lee, head of Carlyle Asia Real Estate, said in the statement.
Those factors will support growth in both rent and capital value for well-operated retail properties, he added. Through the acquisition, Carlyle entered a strategic partnership with SZITIC Commercial Property, based in the southern Chinese city of Shenzhen, according to the statement.
Carlyle Asia Real Estate, set up in 2001, has invested more than $2.1 billion of equity in Asia. In China, it has made 14 investments with total value of $2.5 billion, it said in the statement.
The Suzhou mall has a gross floor area of 136,000 square meters (1.5 million square feet) on four above-ground floors and one floor of retail space in the basement, according to the statement. The Hangzhou mall has four floors above ground and two basement floors for car parks with a total gross floor area of 52,000 square meters, it said.
Both malls have been in operation for more than three years, with tenants selling fashion, electronics, food and beverages under brands including Wal-Mart, Sephora and Starbucks, according to the statement.
Carlyle managed $176 billion globally by March in funds including private equity and real estate, the statement showed.
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