The Johnny Ronan and Richard Barrett-backed China Real Estate Opportunities (CREO) is set to spend over €600 million on properties in Shanghai, Beijing and other centres.
The company announced yesterday that it is raising €385 million through a share issue and seeking admission to London's Alternative Investment Market. The firm intends raising the the stg£260 million (€385.8 million) by placing 34.4 million shares at £7.56 a-unit.
It will use the cash to buy seven investment and development properties, to provide working capital and for further acquisitions.
The total cost of this "initial property portfolio" as the company calls it, will come to stg£416.6 million (€626 million).
The initial property portfolio does not include the Xidan Centrepoint shopping mall, hotel and office complex in Beijing, which the company agreed to buy in February, but which has since become the subject of a legal row with state-controlled China Metallurgical Construction (CMC).
CMC's subsidiary, Xin'ao Xijun, brokered the deal. But the state company is attempting to pull out of the arrangement and to put Xin'ao Xijun up for sale, but only to China-based buyers. The issue has gone to arbitration. As a result, CREO has already told potential investors that the the initial property portfolio does not include the Centrepoint property.
One of the properties that it will buy is the Treasury Building in Shanghai, which is owned by a subsidiary of Real Estate Opportunities, in which Mr Ronan and Mr Barrett's company, Treasury Holdings, holds a majority stake.
The other properties it will be buying include City Centre phases one, two, three and five at Hongqiao, close to Shanghai's Hongqiao Airport.
This is a commercial and shopping complex. Phase one, two 25-storey towers over a six-storey shopping centre is completed and fully let. The others are in various stages of development. CREO intends building a 77,512sqm mixed use property on phase three.
It will also buy Beijing Logistics Park, an undeveloped site to the north of the city's airport, where it will be providing office space to cater for what it believes will be high demand from international tenants.
CREO has appointed TreasuryHoldings China Ltd as its investment manager. Davy will handle the Irish share placing.
