Chinese property developers are finding new ways to circumvent government restrictions and obtain financing to keep their building projects alive.
As Beijing leans on the country’s banks and local governments in its efforts to keep tight control on real estate prices, developers are finding new sources of money, including raising private equity funds and partnering with foreign funds and institutions, and increasingly tapping China’s growing numbers of wealthy individuals. Among those capitalising on the trend is Shanghai-based Noah Wealth Management, a NYSE-listed firm that distributes investment products to its client base of wealthy mainland individuals.
For example, last year when the Chinese unit of Singapore-listed resort company Banyan Tree decided to raise a Rmb500m ($79m) real estate fund for its chain of luxury resorts and condominiums, it went to Noah, which raised the money from its clients. It charged Banyan Tree a 1 per cent fee for the service, said Thomas Wu, Noah’s chief financial officer.