InfraRed NF China Real Estate Fund II exits mezzanine loan project in China

4 April 2019 Investments
InfraRed NF China Real Estate Fund II (the “Fund”) is pleased to announce its exit from a mezzanine loan to a Hong Kong listed company, Master Glory Group Limited (HKEX: 0275). The mezzanine loan was repaid in full prior to the original maturity date of 31 December 2017 for an aggregate amount of US$103.5m. The Fund’s share of the proceeds is 32% in accordance with its pro-rata share of the loan.

The mezzanine loan was used to finance the acquisition of a 49% minority interest in a prime mixed use commercial asset with total GFA of c.118,000 sqm in YueXiu District, Guangzhou. The building comprises serviced apartments, office and retail with the benefit of direct access in the basement levels to the Guangzhou metro network.

At time of exit, the sales price of the serviced apartments had materially exceeded underwriting expectations with the office and retail portions benefiting from a c.100% occupancy/leasing rate. Given the strong underlying performance an early repayment of the loan was negotiated with the borrower. This investment is the 4th exit for China Fund II and the 6th successful exit of a mezzanine transaction in China for the platform.

Stuart Jackson, the CEO of InfraRed NF Investment Advisers commented, “Over the last decade InfraRed NF have developed deep expertise as a mezzanine lender in China. We are pleased to have successfully exited another transaction further validating our business model.”

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