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Staff of Reuters 3 Minutes to Read (Reuters) – SHANGHAI (Reuters) – Warburg Pincus is banking on China’s urban regeneration and redevelopment industry, announcing the formation of a joint venture on Wednesday that will buy underutilized properties in Shanghai and Beijing and turn them into serviced apartments, creative offices, or mixed-use commercial developments. Golden Union Assets, a joint venture between Blackstone and China’s Golden Union Group, now owns and manages 19 buildings worth 15 billion yuan ($2.32 billion), with plans to more than triple its assets under management to 50 billion yuan in three years. At a ceremony in Shanghai, Qiqi Zhang, managing director of Warburg Pincus, remarked, “This investment underlines our trust in the great potential prospect in urban rejuvenation and reconstruction.” He claimed Warburg Pincus will “turbocharge” the company’s growth by leveraging its worldwide resources and local knowledge. Urban revitalization is Warburg Pincus’ latest concentration in real estate investing, having previously invested in approximately 40 billion yuan worth of renovated properties in China. Warburg Pincus, whose president is former US Treasury Secretary Timothy Geithner, has made significant investments in China’s logistics and data centers in the past. China has placed restrictions on the real estate market, but it has encouraged investment in urban redevelopment and rental buildings. The debut of Warburg Pincus’ new urban renewal platform coincides with China’s recent creation of a public infrastructure real estate investment trusts (REITs) market. A projected development of that sector could provide a way out for commercial real estate investors. Warburg Pincus hopes to profit on Golden Union’s decade-long experience in urban renewal through the joint venture, according to Zhang. The collaboration with Warburg Pincus, according to Jessica Yu, chairman of Golden Union, makes it easier to acquire long-term finance. “What is the most difficult aspect of implementing urban regeneration projects? You’ll need money for the long term and at a low cost “she stated during the ceremony “This is why we’ve teamed up with Warburg Pincus.” (1 US dollar = 6.4567 Chinese yuan) Samuel Shen and Andrew Galbraith contributed reporting, while Jonathan Oatis edited the piece./nRead More

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