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Vanke to invest S$608m in China property agency Lianjia
[HONG KONG] China Vanke, the nation's No.2 homebuilder by sales, is investing 3 billion yuan (S$608 million) for an undisclosed stake in domestic real estate agency Lianjia, becoming its latest heavyweight backer ahead of a planned initial public offering (IPO).
Beijing-based Lianjia already has the backing of Chinese technology giants Baidu Inc and Tencent Holdings as well as venture capital firms including Huasheng Capital, according to local media.
In January, Vanke's smaller peer Sunac China had invested 2.6 billion yuan in Lianjia for a 6.25 per cent stake, valuing the real estate agency at 41.6 billion yuan.
Vanke, the object of a bruising power struggle, has been spreading its wings over the past two years to areas such as property management and logistics property as the development business struggles amid tightening margins and intensifying competition.
It has been in crisis since late 2015 as financial conglomerate Baoneng Group built up a 25 per cent stake and sought to oust management.
"Vanke is optimistic about Lianjia's development outlook," Vanke said in a statement on Thursday that disclosed the investment. It did not reveal the size of the stake it bought in Lianjia.
Local media first reported Vanke's investment in Lianjia, also known as Homelink, on Wednesday.
In April 2016, Lianjia, aiming to IPO in China, Hong Kong or the Nasdaq, raised 6 billion yuan from Baidu, Tencent, Huasheng Capital, Source Code Capital and others, according to local media.
Sunac said in January Lianjia had a network of over 8,000 branch offices covering 28 key cities and over 130,000 real estate agents in its workforce. Its unaudited consolidated net assets amounted to 1.6 billion yuan as of the end of June, 2016.