Beijing‘s regulatory firestorm is hitting large swathes of China’s economy, but global investors including Blackstone and Warburg Pincus are ramping up bets on Chinese rental properties, judging the political wind is blowing in their favour.
China has cracked down on private tutoring, brought monopolistic tech giants to their knees, and stepped up curbs on home buying. But Beijing is wooing capital to help provide rental housing and is attracting plenty of institutional interest.
In China, “people need to be housed, but houses have become too expensive to buy. You need to have housing for rent,” said Graeme Torre, managing director of APG Asset Management, which has entered China’s rental housing market in partnership with U.S. property developer and operator Greystar.
“We like to invest with policy rather than trying to avoid it or invest against it. So I’d like to think it’s politically correct,” Torre said, estimating APG will commit around 1 billion euros ($1.17 billion) into Chinese rental housing over the next 3-5 years.
Centralized long-term rental apartments – or multifamily as they’re called in the United States – are the best solution to the housing affordability issue in China’s cosmopolitan cities, said Qiqi Zhang, managing director of Warburg Pincus .
“We think long-term rental housing is the next big opportunity in China, like logistics real estate a decade ago, or data centres five years ago.”
The U.S. private equity giant has backed Chinese apartment rental brands including Mofang, Ziroom, TULU and Base.
There was little institutional interest in China’s rental property market before 2017, when President Xi Jinping told the 19th Communist Party congress China will encourage both housing purchase and renting. Beijing has stepped up calls this year to increase supply of rental housing.
Among measures China has rolled out to revamp a market dominated by retail landlords, institutional investors hail two recent incentives – a big tax break effective this October, and the launch of a market for real estate investment trusts (REITs).
NEEDLE MOVER
The tax break – expected to boost margins by 10% for operators – and a potential exit channel through REITs are “the needle mover,” said Eric Pang, China head of Capital Markets for property consultancy JLL .
Investors will also benefit from demographic tailwinds.
Increasing population density and mobility in big cities such as Shanghai and Beijing, draconian curbs on home buying, as well as later marriages and childbearing will boost demand for multifamily housing, Pang said.
“This is a market with big potential,” he added. “Global funds seeking returns will ramp up investment.”
Foreign institutions already involved in China’s rental housing market include Singaporean sovereign wealth fund GIC and the Canada Pension Plan Investment Board (CPPIB).
“Transaction volume in China won’t climb to $10 billion overnight, but there will be significant growth in the medium term,” said Henry Chin, APAC head of research at CBRE , which recently helped Blackstone acquire a rental property in Shanghai.
Greystar, which launched a $550 million China-focused fund in 2019 in partnership with Dutch pension investor APG and other global institutional investors, said it will now step up investing in China as government support becomes tangible. It already owns a 474-room rental apartment building in downtown Shanghai as well one under development.
BRAND VALUES
“It’s a bit like luxury cars. There’s an added value to the product if there is a recognised and reputable brand attached,” said Torre of APG, which is backing Greystar’s China expansion.
China’s total renter population will exceed 240 million in 2022, and in Shanghai alone, the mid- and high-end multifamily market will generate at least 150 billion yuan ($23 billion) in annual rental incomes, CBRE estimates.
Opportunistic capital is piling in. Private equity and venture capital investment in the sector has surged over the past few years, according to CBRE.
Debt-fuelled expansion by some operators who adopt a light-asset model – renting flats from landlords on long-term leases and then subleting the properties to tenants – led to financial turmoil last year that crippled Danke Apartment, a major online apartment rental platform.
“It’s not the problem with the market. It’s the problem with some players’ business models,” said Charles Ma, Greater China Managing Director of Greystar, adding more investors are adopting the strategy of buying-and-holding.
“The industry shakeout is good for us. We have patience investing in this market.”
($1 = 0.8520 euros)
($1 = 6.4814 Chinese yuan renminbi)
(Reporting by Samuel Shen in Shanghai and Kane Wu in Hong Kong; Editing by Lincoln Feast.)
CHARLESTON, W.Va. (AP) — A linebacker at Division II West Virginia State was fatally shot during what the university said Thursday is being investigated by police as a home invasion.
The body of Jyilek Zyiare Harrington, 21, of Charlotte, North Carolina, was found inside an apartment Wednesday night in Charleston, police Lt. Tony Hazelett said in a statement.
Hazelett said several gunshots were fired during a disturbance in a hallway and inside the apartment. The statement said Harrington had multiple gunshot wounds and was pronounced dead at the scene. Police said they had no information on a possible suspect.
West Virginia State said counselors were available to students and faculty on campus.
“Our thoughts and prayers are with Jyilek’s family as they mourn the loss of this incredible young man,” West Virginia State President Ericke S. Cage said in a letter to students and faculty.
Harrington, a senior, had eight total tackles, including a sack, in a 27-24 win at Barton College last week.
“Jyilek truly embodied what it means to be a student-athlete and was a leader not only on campus but in the community,” West Virginia State Vice President of Intercollegiate Athletics Nate Burton said. “Jyilek was a young man that, during Christmas, would create a GoFundMe to help less fortunate families.”
Burton said donations to a fund established by the athletic department in Harrington’s memory will be distributed to an organization in Charlotte to continue his charity work.
West Virginia State’s home opener against Carson-Newman, originally scheduled for Thursday night, has been rescheduled to Friday, and a private vigil involving both teams was set for Thursday night. Harrington previously attended Carson-Newman, where he made seven tackles in six games last season. He began his college career at Division II Erskine College.
“Carson-Newman joins West Virginia State in mourning the untimely passing of former student-athlete Jyilek Harrington,” Carson-Newman Vice President of Athletics Matt Pope said in a statement. “The Harrington family and the Yellow Jackets’ campus community is in our prayers. News like this is sad to hear anytime, but today it feels worse with two teams who knew him coming together to play.”
DETROIT (AP) — Joe Schmidt, the Hall of Fame linebacker who helped the Detroit Lions win NFL championships in 1953 and 1957 and later coached the team, has died. He was 92.
The Lions said family informed the team Schmidt died Wednesday. A cause of death was not provided.
One of pro football’s first great middle linebackers, Schmidt played his entire NFL career with the Lions from 1953-65. An eight-time All-Pro, he was enshrined into the Pro Football Hall of Fame in 1973 and the college football version in 2000.
“Joe likes to say that at one point in his career, he was 6-3, but he had tackled so many fullbacks that it drove his neck into his shoulders and now he is 6-foot,” said the late Lions owner William Clay Ford, Schmidt’s presenter at his Hall of Fame induction in 1973. “At any rate, he was listed at 6-feet and as I say was marginal for that position. There are, however, qualities that certainly scouts or anybody who is drafting a ballplayer cannot measure.”
Born in Pittsburgh, Schmidt played college football in his hometown at Pitt, beginning his stint there as a fullback and guard before coach Len Casanova switched him to linebacker.
“Pitt provided me with the opportunity to do what I’ve wanted to do, and further myself through my athletic abilities,” Schmidt said. “Everything I have stemmed from that opportunity.”
Schmidt dealt with injuries throughout his college career and was drafted by the Lions in the seventh round in 1953. As defenses evolved in that era, Schmidt’s speed, savvy and tackling ability made him a valuable part of some of the franchise’s greatest teams.
Schmidt was elected to the Pro Bowl 10 straight years from 1955-64, and after his arrival, the Lions won the last two of their three NFL titles in the 1950s.
In a 1957 playoff game at San Francisco, the Lions trailed 27-7 in the third quarter before rallying to win 31-27. That was the NFL’s largest comeback in postseason history until Buffalo rallied from a 32-point deficit to beat Houston in 1993.
“We just decided to go after them, blitz them almost every down,” Schmidt recalled. “We had nothing to lose. When you’re up against it, you let both barrels fly.”
Schmidt became an assistant coach after wrapping up his career as a player. He was Detroit’s head coach from 1967-72, going 43-35-7.
Schmidt was part of the NFL’s All-Time Team revealed in 2019 to celebrate the league’s centennial season. Of course, he’d gone into the Hall of Fame 46 years earlier.
Not bad for an undersized seventh-round draft pick.
“It was a dream of mine to play football,” Schmidt told the Detroit Free Press in 2017. “I had so many people tell me that I was too small. That I couldn’t play. I had so many negative people say negative things about me … that it makes you feel good inside. I said, ‘OK, I’ll prove it to you.’”
VICTORIA – British Columbia’s Environment Assessment Office has fined Coastal GasLink Pipeline Ltd. $590,000 for “deficiencies” in the construction of its pipeline crossing the province.
The office says in a statement that 10 administrative penalties have been levied against the company for non-compliance with requirements of its environmental assessment certificate.
It says the fines come after problems with erosion and sediment control measures were identified by enforcement officers along the pipeline route across northern B.C. in April and May 2023.
The office says that the latest financial penalties reflect its escalation of enforcement due to repeated non-compliance of its requirements.
Four previous penalties have been issued for failing to control erosion and sediment valued at almost $800,000, while a fifth fine of $6,000 was handed out for providing false or misleading information.
The office says it prioritized its inspections along the 670-kilometre route by air and ground as a result of the continued concerns, leading to 59 warnings and 13 stop-work orders along the pipeline that has now been completed.
This report by The Canadian Press was first published Sept. 12, 2024.
