Century Bridge backs Chinese middle-income residential project

Century Bridge Capital has invested $114 million in a middle-income residential project in Taicang, China.

Century Bridge Capital has invested $114 million in a middle-income residential project in Taicang, China. The project is a joint venture with Hong Kong-based developer Jingrui.

PRESS RELEASE

BEIJING and DALLAS, April 2, 2020 /PRNewswire/ — Century Bridge Capital announced today that it has invested in a Chinese middle-income, residential project in Taicang, China. The project is a joint venture with Hong-Kong listed developer Jingrui, with whom Century Bridge has previously developed successful projects in Ningbo and Wuxi.

Taicang Overview
Taicang is a county-level city in the district of Suzhou in Jiangsu province. Located south of the Yangtze River estuary bordered by Shanghai to the south, the city serves as an extension of Shanghai’s manufacturing footprint and has attracted significant foreign investment, especially from Germany. With over 3000 German companies in Taicang and total investment of over USD 5 billion, Taicang is well-known as the “hometown of German Enterprises”. The Taicang Port functions as an important extension of Shanghai Port and is currently the largest river port and the 12th largest port in China by container volume.

Management Commentary
Commenting on the project Century Bridge CEO, Tom Delatour, noted, “The Taicang opportunity allowed us to invest in a project supported by strong local industry drivers and build on our established relationship with Jingrui. Taicang’s solid economic fundamentals support the viability of the current and longer-term residential market. We believe the 676 unit project is well positioned to capitalize on its location adjacent to the city’s High-tech Zone. In addition, the strength of the local economy should support the ongoing demand for attractive affordable downtown housing. With presales estimated to start in November 2020 we feel our timing is right on target.”

Century Bridge President, Wei Deng, added, “We are pleased to be developing a third project with Jingrui. Their established local development and sales team with whom we will be working has developed two projects in Taicang with a total gross floor area of 545,197 square meters generating revenue exceeding RMB 5 billion. We previously worked with the general manager for the Taicang team on our joint Wuxi project which we successfully exited in 2016 and we are very excited about working with him again. Based on the success of the Ningbo and Wuxi projects and the collaborative relationship we have developed with Jingrui, we are confident that we will also benefit from their intimate knowledge of cities in the Suzhou district as we work together in developing and marketing the Taicang project.”

Taicang Investment – KEY FACTS
Taicang, located in the heart of the Yangtze River Delta Region, is geographically the closest city to Shanghai alongside the Yangtze River and is strongly integrated with Shanghai. In 2018 Taicang’s GDP grew 11.9%, surpassing the national growth rate of 6.6%, with a total GDP of 133.1 billion RMB and achieving a 5-year compounded annual growth rate (CAGR) of 7.4%.

Residential demand drivers – The project is located next to Taicang’s High-tech Zone where over 3,000 German enterprises are clustered. With limited land availability there is a lack of residential supply in the Taicang’s downtown, with only seven comparable projects available for sale. Due to increasing job opportunities created by the consistent business growth, the permanent population has increased by approximately 12,200 residents over the past five years.

Location – The Xinhu Industrial Area where the project is located is included in the downtown area. East of the project is the Taicang High-tech Industrial Zone where substantial employment growth continues to generate a large number of potential buyers.
Amenities and Transportation – The site is within close proximity to Elementary and High Schools, Medical services, shopping centers, parks and recreation facilities are within 10 minutes by car. Two high-speed railways under construction with expected completion in June 2020. Upon completion travel time to Shanghai will be reduced to 15 minutes.

Personal Income Growth/Affordability – Average per capita disposable income grew to RMB 63,076 in 2018 reflecting an annual growth rate of 8% for the five years ended December 31, 2018 and making it higher than most cities in China. In the downtown area the housing price-to-income ratio of a typical apartment for a household of three is estimated at 9.7. With an expected average price of RMB 15,000, our project will be more affordable at a price-to-income ratio of 7.9.

Joint Venture Partner – The project is being developed by a joint venture of Century Bridge and Jingrui, a Hong Kong listed developer with which Century Bridge has previously developed projects in Ningbo and Wuxi.

Development – The $114 million project includes above-ground, gross buildable area of 65,511 square meters/705,159 square feet on a site of 32,722 square meters/352,757 square feet.

Residential – Will comprise approximately 64,224 square meters/691,315 square feet, representing 98% of above ground, gross buildable area, consisting of eight high-rise buildings with 676 residential units and including 503 underground parking spaces.

Century Bridge is a private equity firm with offices in Beijing, China and Dallas, Texas. The firm is focused exclusively on investment in the middle-income, residential real estate sector in China’s growing Tier 2 and 3 cities.
www.centurybridge.com