{"id":233295,"date":"2021-05-06T20:04:58","date_gmt":"2021-05-06T12:04:58","guid":{"rendered":"https:\/\/www.mingtiandi.com\/?p=233295"},"modified":"2022-08-15T14:51:14","modified_gmt":"2022-08-15T06:51:14","slug":"china-rental-residential-here-to-stay-says-warburg-pincus","status":"publish","type":"post","link":"https:\/\/www.mingtiandi.com\/real-estate\/events\/past-events-real-estate\/china-rental-residential-here-to-stay-says-warburg-pincus\/","title":{"rendered":"China Rental Housing Sector Here to Stay Says Warburg Pincus Executive"},"content":{"rendered":"<div class=\"container-lazyload container-vimeo js-lazyload--not-loaded\"><a href=\"https:\/\/player.vimeo.com\/video\/545774871?h=96d5a50115\" id=\"545774871\" class=\"lazy-load-vimeo preview-lazyload preview-vimeo\" data-video-thumbnail=\"https:\/\/i.vimeocdn.com\/video\/1129912944-47df6532b5aad5215c4feda603fb5684b0d22be0a79704fabc05e2a5efea3ff8-d_295x166\" data-video-title=\"Mingtiandi Multi-Family Investment Forum 2021: Spotlight Interview with Warburg Pincus and Golden Union Group\" title=\"Play video &quot;Mingtiandi Multi-Family Investment Forum 2021: Spotlight Interview with Warburg Pincus and Golden Union Group&quot;\">https:\/\/player.vimeo.com\/video\/545774871?h=96d5a50115<\/a><noscript>Video can&#8217;t be loaded because JavaScript is disabled: <a href=\"https:\/\/player.vimeo.com\/video\/545774871?h=96d5a50115\" title=\"Mingtiandi Multi-Family Investment Forum 2021: Spotlight Interview with Warburg Pincus and Golden Union Group\">Mingtiandi Multi-Family Investment Forum 2021: Spotlight Interview with Warburg Pincus and Golden Union Group (https:\/\/player.vimeo.com\/video\/545774871?h=96d5a50115)<\/a><\/noscript><\/div>\n<p>China\u2019s rental residential real estate sector has entered a new era of opportunity, according to one of the industry\u2019s most active investors, after the COVID-19 pandemic helped to take some of the froth off of one of the country&#8217;s hottest sectors.<\/p>\n<p>With headlines over the past year having shown the struggles of apartment rental managers that had counted on government policy support to help them grow from startups to real estate industry giants at internet speed, Warburg Pincus managing director Qiqi Zhang sees the recent downturn as having created expansion opportunities for more solidly built players.<\/p>\n<p style=\"text-align: center;\"><a data-no-instant=\"1\" href=\"https:\/\/www.jll.com.hk\/en\/invest-in-real-estate?utm_source=mtd&#038;utm_medium=ol&#038;utm_campaign=ap-hk-cm-investor-platform-q323&#038;utm_content=set-j&#038;utm_term=780x250\" rel=\"noopener\" class=\"adv-link\" target=\"_blank\" aria-label=\"J-780X250\"><img decoding=\"async\" src=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/10\/J-780X250.gif\" alt=\"\"  width=\"780\" height=\"250\"   \/><\/a><\/p>\n<p>\u201cDevelopers, hotel managers, operators backed by VCs and PEs, all entered the market,\u201d Zhang said. \u201cPeople thought the entry barrier might be low, it\u2019s just acquiring a building and doing some of the renovations. But I think they made a mistake, that before they really had a very strong operating system in place, they started to expand really, really aggressively.\u201d<\/p>\n<p>Zhang, who led the US private equity firm\u2019s investments in multi-family residential projects such as Mofang, Ziroom and Nova Property investment, shared his thoughts on what\u2019s next for China\u2019s build-to-rent sector in a spotlight interview session today on MTD TV, where he appeared together with Jessica Yu Minjun, the chair of urban renewal specialist Shanghai Golden Union Group.<\/p>\n<h3>Carnival Ride Complete<\/h3>\n\n\t\t<style type=\"text\/css\">\n\t\t\t#gallery-1 {\n\t\t\t\tmargin: auto;\n\t\t\t}\n\t\t\t#gallery-1 .gallery-item {\n\t\t\t\tfloat: left;\n\t\t\t\tmargin-top: 10px;\n\t\t\t\ttext-align: center;\n\t\t\t\twidth: 50%;\n\t\t\t}\n\t\t\t#gallery-1 img {\n\t\t\t\tborder: 2px solid #cfcfcf;\n\t\t\t}\n\t\t\t#gallery-1 .gallery-caption {\n\t\t\t\tmargin-left: 0;\n\t\t\t}\n\t\t\t\/* see gallery_shortcode() in wp-includes\/media.php *\/\n\t\t<\/style>\n\t\t<div data-carousel-extra='{\"blog_id\":1,\"permalink\":\"https:\\\/\\\/www.mingtiandi.com\\\/real-estate\\\/events\\\/past-events-real-estate\\\/china-rental-residential-here-to-stay-says-warburg-pincus\\\/\"}' id='gallery-1' class='gallery galleryid-233295 gallery-columns-2 gallery-size-thumbnail'><dl class='gallery-item'>\n\t\t\t<dt class='gallery-icon landscape'>\n\t\t\t\t<a href='https:\/\/www.mingtiandi.com\/real-estate\/events\/warburg-pincus-in-china-multi-family-real-estate-mtd-tv\/attachment\/qiqi-zhang-warburg-pincus-2\/'><img decoding=\"async\" data-attachment-id=\"231029\" data-orig-file=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/qiqi-zhang-warburg-pincus-e1677122292408.jpg\" data-orig-size=\"321,321\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;,&quot;keywords&quot;:&quot;Array&quot;}\" data-image-title=\"qiqi zhang warburg pincus\" data-image-description=\"\" data-medium-file=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/qiqi-zhang-warburg-pincus-e1677122292408.jpg\" data-large-file=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/qiqi-zhang-warburg-pincus-e1677122292408.jpg\" width=\"150\" height=\"150\" src=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/qiqi-zhang-warburg-pincus-e1677122292408-150x150.jpg\" class=\"attachment-thumbnail size-thumbnail\" alt=\"qiqi zhang warburg pincus\" aria-describedby=\"gallery-1-231029\" srcset=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/qiqi-zhang-warburg-pincus-e1677122292408-150x150.jpg 150w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/qiqi-zhang-warburg-pincus-e1677122292408-90x90.jpg 90w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/qiqi-zhang-warburg-pincus-e1677122292408.jpg 321w\" sizes=\"(max-width: 150px) 100vw, 150px\" \/><\/a>\n\t\t\t<\/dt>\n\t\t\t\t<dd class='wp-caption-text gallery-caption' id='gallery-1-231029'>\n\t\t\t\tQiqi Zhang, Managing Director, Warburg Pincus\n\t\t\t\t<\/dd><\/dl><dl class='gallery-item'>\n\t\t\t<dt class='gallery-icon landscape'>\n\t\t\t\t<a href='https:\/\/www.mingtiandi.com\/real-estate\/speaker-bio-jessica-yu-of-golden-union-investment\/attachment\/jessica-yu-resized\/'><img decoding=\"async\" data-attachment-id=\"223478\" data-orig-file=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/Jessica-Yu-resized.jpg\" data-orig-size=\"702,656\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;,&quot;keywords&quot;:&quot;Array&quot;}\" data-image-title=\"Jessica Yu, Chairman &#038; General Manager, Golden Union Group\" data-image-description=\"\" data-medium-file=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/Jessica-Yu-resized-400x374.jpg\" data-large-file=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/Jessica-Yu-resized.jpg\" width=\"150\" height=\"150\" src=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/Jessica-Yu-resized-150x150.jpg\" class=\"attachment-thumbnail size-thumbnail\" alt=\"Jessica Yu, Chairman &amp; General Manager, Golden Union Group\" aria-describedby=\"gallery-1-223478\" srcset=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/Jessica-Yu-resized-150x150.jpg 150w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/Jessica-Yu-resized-90x90.jpg 90w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/Jessica-Yu-resized-640x640.jpg 640w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/04\/Jessica-Yu-resized-420x420.jpg 420w\" sizes=\"(max-width: 150px) 100vw, 150px\" \/><\/a>\n\t\t\t<\/dt>\n\t\t\t\t<dd class='wp-caption-text gallery-caption' id='gallery-1-223478'>\n\t\t\t\tJessica Yu, Chairman &#038; General Manager, Golden Union Group\n\t\t\t\t<\/dd><\/dl><br style=\"clear: both\" \/>\n\t\t<\/div>\n\n<p>Zhang and Yu shared their thoughts in a spotlight interview session that was part of Mingtiandi\u2019s Asia Multi-Family Investment Forum 2021, which was sponsored by Yardi.<\/p>\n<p>Investing in China\u2019s multi-family market segment has been a \u201croller coaster\u201d experience in the last several years, Zhang said, as government efforts to encourage the sector sparked a surge of activity that has seem some less carefully managed players fall by the wayside during the pandemic.<\/p>\n<p>\u201cIt\u2019s challenging now for the industry, but at the same time it creates a lot of opportunities, especially for these leading players,\u201d he noted.<\/p>\n<p style=\"text-align: center;\"><a data-no-instant=\"1\" href=\"https:\/\/www.mipim-asia.com\/?utm_source=mingtiandi&#038;utm_medium=barter_website&#038;utm_campaign=mipimasia2023\" rel=\"noopener\" class=\"adv-link\" target=\"_blank\" aria-label=\"AR-607487_Mipim Asia_23_Banner Resize 780&#215;250\"><img decoding=\"async\" src=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/10\/AR-607487_Mipim-Asia_23_Banner-Resize-780x250-1.jpg\" alt=\"\"  srcset=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/10\/AR-607487_Mipim-Asia_23_Banner-Resize-780x250-1.jpg 780w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/10\/AR-607487_Mipim-Asia_23_Banner-Resize-780x250-1-400x128.jpg 400w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/10\/AR-607487_Mipim-Asia_23_Banner-Resize-780x250-1-640x205.jpg 640w\" sizes=\"(max-width: 780px) 100vw, 780px\" width=\"780\" height=\"250\"   \/><\/a><\/p>\n<p>\u201cZiroom, which is one of our portfolio companies, is now the leading player in the decentralised space, and they are actually expanding really quickly this year,\u201d Zhang said. \u201cIn the same way that, Mofang, a more centralised player holding buildings, has also done a lot of M&amp;A over the last six months and are expanding very quickly.\u201d<\/p>\n<p>In 2018, Warburg Pincus <a href=\"https:\/\/www.mingtiandi.com\/real-estate\/finance-real-estate\/warburg-pincus-tencent-lead-investment-in-ziroom-rental-housing\/\">had led a RMB 4 billion (then $621 million) round of funding in Ziroom<\/a>, which matches apartment owners with tenants in return for management fees. In 2013, the company made its first investment <a href=\"https:\/\/www.mingtiandi.com\/real-estate\/finance-real-estate\/mofang-apartments-caisse\/\">in Mofang<\/a>, a Shanghai-based rental apartment operator that owns its rental assets.<\/p>\n<h3>Ideal Weight<\/h3>\n<p>From having backed a range of rental apartment strategies, Zhang made it clear that asset-heavy strategies may be best suited to a market where rental residential is still in its early stages.<\/p>\n<p>\u201cIf you own the underlying asset, you do have a lot of advantages,\u201d he said. \u201cOne is you are more defensive to a downturn cycle. Second, on a per-square-metre basis, because you own the underlying asset, you will have the capital gain.\u201d<\/p>\n<div id=\"attachment_233296\" style=\"width: 790px\" class=\"wp-caption alignnone\"><img decoding=\"async\" aria-describedby=\"caption-attachment-233296\" class=\"size-full wp-image-233296\" src=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/05\/shankangli-5.jpg\" alt=\"shankangli 5\" width=\"780\" height=\"397\" srcset=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/05\/shankangli-5.jpg 780w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/05\/shankangli-5-400x204.jpg 400w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2021\/05\/shankangli-5-420x214.jpg 420w\" sizes=\"(max-width: 780px) 100vw, 780px\" \/><p id=\"caption-attachment-233296\" class=\"wp-caption-text\">Shanghai Golden Union&#8217;s Shankangli project in Jing An district<\/p><\/div>\n<p>While owning the property is the way forward, acquiring and repositioning existing assets may offer a means to provide stronger returns at lower capital costs, as Golden Union\u2019s Yu illustrated from her experience acquiring and repositioning the Shankangli retail project in Shanghai\u2019s Jing An district.<\/p>\n<p>For that project, Golden Union bought a former steel factory and converted the premises into a hip retail and entertainment destination.<\/p>\n<p>\u201cAt the time (that Golden Union acquired the asset), the area surrounding the property was still a construction site, and not as promising as it looks today,\u201d she said. \u201cBut we have always been forward looking and we anticipated the future prospects of the property.\u201d<\/p>\n<p style=\"text-align: center;\"><a data-no-instant=\"1\" href=\"https:\/\/www.mipim-asia.com\/?utm_source=mingtiandi&#038;utm_medium=barter_website&#038;utm_campaign=mipimasia2023\" rel=\"noopener\" class=\"adv-link\" target=\"_blank\" aria-label=\"AR-607487_Mipim Asia_23_Banner Resize 780&#215;250\"><img decoding=\"async\" src=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/10\/AR-607487_Mipim-Asia_23_Banner-Resize-780x250-1.jpg\" alt=\"\"  srcset=\"https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/10\/AR-607487_Mipim-Asia_23_Banner-Resize-780x250-1.jpg 780w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/10\/AR-607487_Mipim-Asia_23_Banner-Resize-780x250-1-400x128.jpg 400w, https:\/\/www.mingtiandi.com\/wp-content\/uploads\/2023\/10\/AR-607487_Mipim-Asia_23_Banner-Resize-780x250-1-640x205.jpg 640w\" sizes=\"(max-width: 780px) 100vw, 780px\" width=\"780\" height=\"250\"   \/><\/a><\/p>\n<p>Yu\u2019s company has spent almost 20 years as a developer and operator of asset-heavy projects, including the Kempinski serviced apartments in Shanghai that the company acquired 12 years ago.<\/p>\n<p>To better leverage the potential returns from managing value-add projects such as Shankangli, Yu\u2019s commercial management unit, Golden Union Commercial, began trading on the A-share market last year. The company runs about 70 projects in China with a gross floor area of over 1 million square metres (10.8 million square feet), and the experience has helped Golden Union develop expertise in managing asset-heavy projects, Yu said.<\/p>\n<h3>Changing Face of Cities<\/h3>\n<p>The two executives pointed to rental housing as fulfilling a key policy need in China, by allowing young professionals a way to find quality housing in the country\u2019s largest cities. Yu drew particular attention to a \u201ctalent war\u201d that has erupted among cities in recent years.<\/p>\n<p>\u201cProvincial capitals like Wuhan, Xi\u2019an and Hangzhou attract hundreds of thousands or even millions of young people every year,\u201d she said. \u201cThese young talents are well-educated and suitable to the needs of a developing city.\u201d<\/p>\n<p>However, with the costs of home acquisition in China\u2019s major cities now among the least affordable in the world, creating professionally managed rental housing makes these cities more appealing to young professionals.<\/p>\n<h3>Greater China Up Next<\/h3>\n<p>MTD TV\u2019s Asia Multi-Family Forum <a href=\"https:\/\/www.mingtiandi.com\/real-estate\/events\/panel-multi-family investment-in-greater-china\/\">focuses on Greater China<\/a> for the next panel discussion on Wednesday 12 May. That show will feature Greystar\u2019s managing director for China investment, Charles Ma, Weave Living founder and CEO Sachin Doshi, Eric Pang, head of capital markets for China at JLL and Keith Chan, CEO of China rental apartment operator Funlive.<\/p>\n<p>Japan will be the focus of <a href=\"https:\/\/www.mingtiandi.com\/real-estate\/events\/panel-multi-family investment-in-japan\/\">a panel discussion on Tuesday 18 May<\/a>, with that session to feature Greystar\u2019s senior managing director for Asia Pacific, Ed Boyd, Ken Sakuramoto, head of equity advisory for Japan at JLL, and Rushabh Desai, CEO for Asia Pacific at Allianz Real Estate.<\/p>\n<p>On Tuesday 25 May, the Multi-Family Forum concludes with <a href=\"https:\/\/www.mingtiandi.com\/real-estate\/events\/panel-emerging-classes-in-rental-residential\/\">a panel on emerging rental residential classes<\/a> in Asia Pacific.<\/p>\n<p>In that session, Jyoti Ramchandani, a managing director at SC Capital overseeing the private equity firm\u2019s Score+ strategy, will join Shusaku Watanabe, head of Japan real estate for , Nuveen, along with two other speakers, to explore opportunities in high-yielding market segments including student housing, co-living and senior living.<\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"container-lazyload container-vimeo js-lazyload--not-loaded\">https:\/\/player.vimeo.com\/video\/545774871?h=96d5a50115Video can&#8217;t be loaded because JavaScript is disabled: Mingtiandi Multi-Family Investment Forum 2021: Spotlight Interview with Warburg Pincus and Golden Union Group (https:\/\/player.vimeo.com\/video\/545774871?h=96d5a50115)<\/div>\n<p>China\u2019s rental residential real estate sector has entered a new era of opportunity, according&#8230;&nbsp;<a href=\"https:\/\/www.mingtiandi.com\/real-estate\/events\/past-events-real-estate\/china-rental-residential-here-to-stay-says-warburg-pincus\/\">Read&nbsp;More>><\/a><\/p>\n","protected":false},"author":9671,"featured_media":233299,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[4092],"tags":[5382,3457,5359,8554,8380,8400,7413,1504],"ppma_author":[8847],"authors":[{"term_id":8847,"user_id":9671,"is_guest":0,"slug":"christopher-caillavet","display_name":"Christopher Caillavet","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/500c291c35a85a2ad5827cf7c6d198e1?s=96&d=mm&r=g","user_url":"","last_name":"Caillavet","first_name":"Christopher","description":""}],"_links":{"self":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts\/233295"}],"collection":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/users\/9671"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/comments?post=233295"}],"version-history":[{"count":0,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/posts\/233295\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/media\/233299"}],"wp:attachment":[{"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/media?parent=233295"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/categories?post=233295"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/tags?post=233295"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.mingtiandi.com\/wp-json\/wp\/v2\/ppma_author?post=233295"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}