InfraRed NF closes US$92.2m mezzanine financing deal
|Category||Asian Real Estate / Hong Kong|
InfraRed NF, the leading Greater China real estate investment manager, is pleased to announce the closing of a US$92.2m financing investment with Fullsun International Holdings Group (“Fullsun International”), a Hong Kong listed property developer. The loan will be used by Fullsun International to fund further construction and the acquisition of projects from smaller developers to support the further growth of the company.
The loan is secured on a portfolio of two ring-fenced partially completed residential development projects in Changsha, with additional credit enhancement provided from a mature office asset in Hong Kong. Changsha is the provincial capital of Hunan, which has a population of around 70 million people, and is a major logistics hub for inner China. The estimated gross portfolio value of the ring-fenced collateral is more than US$380m.
Fullsun International is the offshore listed vehicle of a large mainland Chinese developer, Fusheng Group whose sales achieved approximately US$9bn in 2018 according to third party database Soufun. The loan was structured with the additional benefit of recourse to the Hong Kong listed parent company.
InfraRed NF, co-invested with Firewave Management Limited, an indirect wholly-owned subsidiary of Metro Holdings Limited, a Singapore listed company.
InfraRed NF was able to execute the transaction in under two months due to its expertise and reputation in mezzanine financing. To date, InfraRed NF has completed 10 mezzanine investments, seven of which have been repaid, that committed over US$650m of capital to mezzanine transactions in China. This new loan forms part of InfraRed NF’s investment strategy to focus its lending activity on projects in regional hubs, benefiting from infrastructure investment, with strong economic fundamentals and sizeable population bases.
Grant Chien, Head of Special Situations Financing at InfraRed NF Investment Advisers, commented:
“Our track record of working with our portfolio companies on-the-ground combined with our operational know-how gave us the insight and ability to close the deal in under two months. Focusing on positive, long-term trends enables the team to look beyond short-term residential sector cyclicality and recent capital market volatility. Fullsun International has a strong acquisition pipeline of distressed opportunities and we look forward to continue working with them across Tier One and select Tier Two cities.”
Stuart Jackson, CEO of InfraRed NF Investment Advisers, added:
“A window of opportunity has arisen for InfraRed NF from the well-publicised contraction of available credit within China. China’s deleveraging is creating an attractive investment environment for us resulting in a healthy pipeline of mezzanine and value-add deals.”
About InfraRed NF
InfraRed NF is a Hong Kong-based joint venture between InfraRed Capital Partners and Vervain. Established in 2007, InfraRed NF is a leading investor in the Greater China real estate market with a proven track record of delivering superior returns through a combination of mezzanine financing and value-add investing.
InfraRed Capital Partners is a leading global investment manager focused on infrastructure and real estate. It operates worldwide from offices in London, Hong Kong, New York, Seoul and Sydney and has launched 17 funds including two listed on the London Stock Exchange. With over 130 professionals, it manages in excess of US$10bn of equity in multiple private and listed funds, primarily for institutional investors across the globe.
Vervain (which includes entities operating under the former name of “Nan Fung China”) is a Hong Kong-based private group of companies established in 2004. Vervain has a diversified real estate business, including property investment, property development, project management, real estate private equity investment as well as other financial and mezzanine financing investment. Vervain’s property portfolio comprises high quality residential, commercial, industrial, serviced apartments and hotel properties in Hong Kong, London, New York, Seoul, Tokyo and Vietnam.