You may have heard of a chap called Vincent Lo...
If you haven’t... you should have!
He's one of Asia’s most famous tycoons whose speciality is real estate.
He shot to fame as a TV star on a programme called "The Winner" - the USA's take on "The Apprentice" - fronted by Donald Trump.
This is pretty ironic as Lo won a $1bn lawsuit against Trump in 2005 over the biggest land deal in New York’s history.
So you can see that Lo is an interesting candidate who is quite capable of success.
But it's what he's doing now that's interesting...
Lo has chosen Aim on which to float China Central Properties - a fund that targets distressed assets across China.
He is also the chairman of Hong Kong based Shui On Construction and Materials (Socam). It's the lead investor in five property projects in Beijing, Dalian, Qingdao and Chengdu, thought to be worth a collective £150m. They're planned to be used as seed assets for the new fund.
The company want to sweep up the huge number of unfinished office and residential blocks in China’s cities, which have been abandoned by bankrupt developers.
In the 1990’s many companies invested in all kinds of real estate in line with the surging economy.
But many were forced to dump their projects when the government clamped down on over-investment in the sector, and more recently by raising interest rates.
The beauty of becoming involved with distressed property is that once new funds are secured these projects can be completed within a year or two.
To give you some idea of the opportunity here there was 320msq of unsold property in China at the end of last year. That's compared to 65msq in 2000, according to CB Richard Ellis.
Acquiring the rights to these assets can be a very lengthy and complicated process.
But Lo appears to be an exception to the rule. He's one of a few developers to succeed on the Chinese mainland. His projects have included the highly acclaimed Xintiandi centre in Shanghai.
China Central Properties is planning to float on AIM before 15 June, and it is understood that Socam will have a 39% shareholding. Other major shareholders will include SpinnakerOchZiff, Stark, Deutsche Bank, and UBS.
This is to keep your eye on.
Until next time,
Melissa Carroll
for The Penny Sleuth
