InfraRed NF, the Hong Kong-based joint venture between InfraRed Capital Partners and Nan Fung Group, is pleased to announce the sale of Project Graceland (the ‘Project’) to Nova Property Investment Co. Ltd. at a gross asset value of RMB 610m (c.US$88m).
The Project, a 3-star domestically-branded hotel situated near Xintiandi, one of the top tourist destinations in Shanghai, China, was acquired by InfraRed NF China Real Estate Fund II (the ‘Fund’) in July 2016 in an off-market transaction.
Although the original value-add business plan was to convert the property into an international 4-star select-service hotel, an early exit was achieved for the asset by repackaging the property as a mixed use office and serviced apartment redevelopment project. The change of use strategy enabled InfraRed NF to resell the asset through a competitive sales process.
The sale achieved a return well in excess of the Fund’s target returns, above the original Project business plan, in a period of approximately 8 months.
To date the Fund’s strategy has focused on mezzanine investments where the market environment has been particularly attractive. This disposal marks the 3rdexit for the Fund and the 12th exit for the platform in mainland China.