BEIJING, Sept. 15-- Morgan Stanley and a Chinese investment firm have bought an office building in downtown Shanghai for$90 million, marking the latest real-estate investment in the country's richest city.
The 38-story building near the city's upscale shopping thoroughfare of Nanjing Road was built in 1997 by a Hong Kong-funded venture for US$150 million, Morgan Stanley's partner, Shanghai Dragon Investment, said Wednesday.
But the 1997/98 Asian financial crisis then threw the unidentified original developer deep into debt, Dragon said in a statement without elaborating.
Morgan Stanley's share of the property was not specified.
"We finally managed to take over the property after a long period of tough negotiations," the city government-run investment firm said.
Capitalized at US$360 million, Dragon has invested in local property and highway projects and helped state lenders dispose of sour loans, according to its Web site
Morgan Stanley has been active in Chinese property, eyeing deals such as apartment projects with Hong Kong-listed Shanghai Forte Land Co. Ltd.
In 2003, it announced a US$90 million investment alongside Shanghainese and Singaporean partners in a high-end residential complex adjacent to the city's trendy Xintiandi area.
Global property investors are increasingly seeing China as a top pick in Asia after Japan, because the potential for fat profits more than compensates for the risk from regulatory uncertainties, industry analysts say.
Now, the likes of Dutch financial services group ING and top Australian investment bank Macquarie Bank Ltd. are also snatching up properties in Shanghai-- China's financial center-- despite falling housing prices hit by Beijing's economic cooling measures.
Macquarie has spent US$500 million buying Chinese properties this year alone-- nearly matching the US$600 million it had ploughed into mainly residential developments in the country over the past decade, Richard David, Managing Director of Macquarie Property Investment Banking of China, said last week.
The real estate arm of ING, now closing a deal to take over a six-story mall in Shanghai, is on track to jointly develop a 600 million yuan(US$74.1 million) high-end residential project with Forte Land. Enditem
(Source: Shenzhen Daily/Agencies)