Talks with regulators and investors nearing fruition, says exec
(BEIJING) Macquarie Group Ltd, Australia’s biggest securities firm, is seeking to develop real estate trusts in China, even though financial markets are being roiled by a credit crunch and as China clamps down on property speculators.
Macquarie is in talks with regulators and institutional investors, including insurers and pension funds, to help build a real estate investment trust market in China, said Andrew Low, head of corporate finance in Asia, at a press briefing in Beijing yesterday. The discussions are ‘nearing fruition’, he said without elaborating.
‘There are some issues for foreign money going into Chinese real estate in this macroeconomic environment,’ Nicholas Moore, Macquarie’s global head of investment banking, said at the briefing. ‘But we remain very bullish since the property market obviously reflects China’s strong economic growth.’
Macquarie, the world’s largest private manager of infrastructure such as roads and airports, is stepping up expansion abroad after leading more than US$30 billion of overseas acquisitions last year.
Shareholders will vote in October on the bank’s plans to create a separate holding company, allowing it to raise cash to expand abroad.
China Market Macquarie is sizing up China’s property market even as the government moves to curb speculation in real estate. China raised interest rates on Tuesday for the fourth time since March to cool the world’s fastest growing economy and to control asset bubbles in property and stocks.
Macquarie hopes to replicate in China its strategy in other markets, where it has bought utilities, airports and roads, according to Mr Low. A group led by Macquarie in December bought Thames Water Utilities, supplier to eight million people in London and the Thames Valley area, for Ã‚Â£pounds;4.8 billion (S$14.6 billion).
Real estate investment trusts, or Reits, are trusts that own, manage or lease commercial real estate, or invest in property-related products such as mortgage-backed securities.
Macquarie led China’s first offer of commercial mortgage-backed securities, according to a company statement.
Macquarie climbed 4.2 per cent to A$74.85 at the close yesterday in Sydney, taking gains this week to 16 per cent, the stock’s biggest three-day rally since 1997.
Source: Bloomberg (Business Times 23 Aug 07)