KKR joined hands with FUNLIVE to acquire a rental apartment project in Daxing New Town, with a total consideration of RMB1.87 billion
On March 16, KKR and FUNLIVE jointly acquired a rental apartment from The Cloudland project, which was co-developed by Radiance Group and SCE in Daxing District of Beijing. According to Beijing Municipal Commission of Housing and Urban-Rural Development, total transaction price of the deal was about RMB1.87 billion. With a total GFA of about 96,740 sq m, unit price of the transaction was equivalent to RMB19,330/sq m. After taking over, FUNLIVE will be in charge of operation and management of the project.
The Cloudland is located west of Beijing Daxing Railway Station in the core area of Daxing New Town. Vertical distance from The Cloudland to Huangcun Railway Station of Metro Line 4 is about 700 metres. Accessibility to Beijing South Railway Station, Xi’dan Submarket, Financial Street and other central areas is relatively convenient. With a total land area of about 108,000 sq m and a proposed GFA of about 260,000 sq m, The Cloudland is a large-scale mix-use development comprising residential, retail, office, apartment, and etc., and is currently under construction.
The project is located in the core area of Daxing New Town, occupying a profound location by abutting the Beijing Daxing Railway Station and Metro Line 4, and connecting to Beijing Bio-medicine Park and other industrial submarkets to the south. According to “2020-2035 Regulatory Planning of the Core Area of Daxing New Town”, the area is estimated to achieve a total permanent population of 35,000 people with over 33,000 job opportunities by 2035. The large influx of both residents and work force will likely to boost leasing demand in the area.
According to the recent published “Implementation Plan on Accelerating the Development of Indemnificatory Rental Housing Scheme in Beijing”, rental apartment serves as an important supplement to affordable housing. As the government to include affordable housing into the infrastructure REITs, it should offer another divestment channel to investors of rental apartment. In the long run, as regulation and policy of REITs slowly matures along with the gradual standardized leasing market, rental apartment will likely become an alternative investment sector to both domestic and foreign investment institutions.