InfraRed NF invests c.US$95m in a hotel in Shanghai

InfraRed NF Investment Advisers, a leading China focussed real estate investment manager, is pleased to announce the RMB 650m purchase (c. US$ 95 m) of a hotel located in the Jing’An district of Shanghai. The property has been acquired in a 50/50 joint venture with Nova Property Co. Ltd, an experienced serviced apartment operating partner, who are backed by Warburg Pincus.

The asset is well located in proximity to an MTR station providing easy access to People’s Square CBD and Nanjing Road West CBD. The property is also surrounded by mid-to-high end residential properties and within walking distance of a large shopping mall.

The joint venture will leverage both parties’ value-add knowledge and experience, and Nova’s extensive serviced apartment conversion track record to carry out the asset enhancement program. The existing underperforming 3-star hotel will be repositioned into a vibrant mixed use asset comprising 235 serviced apartments units, co-working office space and retail.
The value-add investment follows the success that InfraRed NF achieved on Project Graceland, a 3-star domestically-branded hotel situated near Xintiandi, which was repositioned and exited earlier this year. The acquisition is the 8th investment for InfraRed NF China Real Estate Fund II which is now 90% committed.

Hans Kang, Chief Investment Officer at InfraRed NF, said:

“We are delighted to have the opportunity to partner with Nova to capture the great potential in Shanghai’s serviced apartment sector which will continue to benefit from the city’s economic expansion and growth. This is the second hotel value-add investment we have made in the past 12 months where we have acquired an asset below replacement cost with significant upside from change of use.”

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