SEB ImmoInvest sells office building in Shanghai
Fund manager SEB Asset Management has sold the Cross Tower in Shanghai to a fund managed by Ascendas, a Singapore-based real estate company. The buyer is a real estate company listed on the Hong Kong Stock Exchange The parties agreed not to disclose the selling price.
However, SEB said it generated a profit on the sale which was was aimed at unlocking the value of the office building in view of the strong demand for Chinese commercial properties.
The 41,2000 m2 Cross Tower, located on Fuzhou Road, was acquired in September 2007 as a 50/50 joint venture with Pacific Star’s Asia Real Estate Income Fund (AREIF) and the SEB Asian Property Fund SICAV- FIS. Valuation of the tower has increased substantially since then because of asset enhancement works by the joint venture which included a change in tenant mix that led to upward rental reversions and high occupancy levels.
Back in April this year SEB sold the Platinum office building in Shanghai for about EUR 200 mln. The property was held by the open-ended real estate fund SEB ImmoInvest.
SEB said it sold the 34,000-m2 property for 30% more than what it was purchased for in November 2006, exceeding the current market value by more than 7%. The asset is located in the Pu Xi office market.
SEB said that it was the first German fund management company to enter the Chinese market at the end of 2006 by acquiring the Class A office building. The move reflected its belief that the market for prime office buildings in Shanghai would appreciate.