China’s leading investor to fund European value-add investments

Fosun Property and Resolution Property today announced a formation of a joint venture company Resolution Property Investment Management LLP (“RPIM”) to act as Fosun’s exclusive investment manager to invest in value-add real estate opportunities in 14 countries across Europe. This is the second asset management platform Fosun Property has invested in since the Japanese IDERA acquisition in May 2014. The joint-venture RPIM will be majority owned by Fosun Property, with the balance owned by Resolution Property’s partners. Fosun Property is the global real estate investment & management platform of Fosun Group (“Fosun”), a leading investment group from China.

RPIM will provide the platform for Resolution Property’s future real estate investment business, including the launch of Resolution Real Estate Fund V later this year. RPIM will be the first property investment platform in Europe for Fosun Property, which will provide the cornerstone funding for future Resolution Property fund launches. Fund V will also target third-party investors.  

RPIM will continue Resolution Property’s well-established strategy of opportunity-driven investment in assets with strong value-add potential, both in the UK and Continental European office and retail markets.  With Fosun’s backing, RPIM will be targeting investments in large assets and portfolios. It will also be actively looking to export Resolution Property’s UK model of office development for the creative and digital sector to new European cities.  

Fosun Property is not a newcomer to the European market: in October 2013, Fosun Property made its European debut with the acquisition of the Lloyds Chambers in the City of London; and in early 2014 when Fosun took over Fidelidade, the largest insurance company in Portugal, Fosun Property started to help manage the €700 million real estate assets under Fidelidade.

Xu Xiaoliang, Vice President of Fosun Group & President of Fosun Property said:

“It is a great pleasure to partner with Resolution Property to establish Fosun’s European Investment & Management platform. It marks a significant step in Fosun’s global approach. After acquiring the Japanese IDERA Capital in 2014, we have focused on finding experienced and professional overseas investment & management platforms as our priority. Fortunately, we found Resolution Property and we share the same investment values. In the future, Resolution Property will be the exclusive platform for value-add investment in Europe for Fosun Property, utilizing Fosun’s insurance capital and building up global investment capability.”

Robert Laurence, Chief Executive of Resolution Property, said:

“This is a major milestone in the development of Resolution Property’s business. Our venture with Fosun provides us with substantial investment capability for future funds and allows us to build on decades of experience in adding value to European property assets through creative management.” 

According to Mr. Guo Guangchang, chairman of Fosun Group, Fosun is committed to becoming a world-class investment group driven by the twin drivers of “Insurance-oriented Comprehensive Financial Capability” and “Global Industrial Integration Capability Taking Roots in China”. This investment is consistent with this strategy and will be accretive to Fosun’s global business platform.

Since 2013, Fosun Property has focused on four investment categories: overseas asset management platforms, direct asset, secondary market and private equity / venture capital. This global strategy is now maturing.  Most recently, in May 2014, Fosun acquired the Japanese asset management platform IDERA. Within six months, IDERA was able to secure two projects in Tokyo: the Citi Group Center & Shinagawa Seaside Park Tower, which drew attention immediately in the Japanese Real Estate Sector. Moreover, these two deals were facilitated by leveraging insurance float plus low-interest debt, which is an excellent example of how Fosun can utilize its insurance platform in future property acquisitions.

As for direct property investment, Fosun Property now holds multiple core assets in New York, London, Sydney, Tokyo and Lisbon. The latest acquisition was 73 Miller Street located in the CBD of North Sydney, a fully occupied office building acquired by Fosun Property in March 2015. In addition, 28 Liberty in New York is now under redevelopment and is open for leasing.

In May, Fosun Property announced its new development project on Madison Avenue, New York: a 350,000 square foot residential tower will arise in Manhattan, which is also Fosun Property’s 1st overseas luxury residential development. And at the end of April, Forte, under Fosun Property, partnered with the Australian EG Funds Management on three development projects in Australia. The completed value of the three projects is approximately $650 million (Australian) and all projects are expected to be delivered within the next four years.

Like Fosun Group, Fosun Property follows value investing principles, and is actively seeking opportunities, including tradable securities linked with real estate businesses all across the globe. Meanwhile, in the private equity / venture capital area, Fosun Property has invested proactively in multiple real estate businesses, and continues to seek acquisitions of overseas companies with potential value to the Chinese market.