InfraRed NF arranges US$92m mezzanine loan

InfraRed NF has provided a US$92.2m mezzanine loan to Hong Kong-listed property developer Fullsun International, securing the deal in less than two months.

Fullsun, the offshore listed vehicle of mainland China developer Fusheng Group, will use the financing to fund further construction and purchase projects from smaller developers.

The financing was secured against a portfolio of two ring-fenced partially-completed residential developments in Changsha, the capital of China’s Hunan province, InfraRed NF said in an announcement.

The gross value of the portfolio is estimated to be more than US$380m.

The new loan builds on InfraRed NF’s strategy of lending on projects in regional hubs benefitting from infrastructure investment, as well as strong economic fundaments and sizeable population bases.

Changsha is home to about 70m people and is a major logistics hub for inner China.

“Focusing on positive, long-term trends enables the team to look beyond short-term residential sector cyclicality and recent capital market volatility,” said Grant Chien, head of special situations financing at InfraRed NF Investment Advisers.

“Fullsun International has a strong acquisition pipeline of distressed opportunities and we look forward to continue working with them across Tier One and select Tier Two cities.”

“A window of opportunity has arisen for InfraRed NF from the well-publicised contraction of available credit within China,” said InfraRed NF Investment Advisers CEO Stuart Jackson.

“China’s deleveraging is creating an attractive investment environment for us resulting in a healthy pipeline of mezzanine and value-add deals.”

Firewave Management, a subsidiary of Singapore-listed Metro Holdings, co-invested with InfraRed NF.

InfraRed NF is a Hong Kong-based joint venture between investment manager InfraRed Capital Partners and Vervain.

Established in 2006, the JV has invested more than US$1.5bn of equity, including 10 mezzanine investments in China.

InfraRed NF’s other main investment strategy targets value-add real estate projects in first-tier cities, including Shanghai, Beijing and Hong Kong.

Related stories

Wang On Group buys Hong Kong asset for US$99m

For more Asia real estate news and intelligence, subscribe to our weekly newsletter or follow APAC Real Estate on LinkedIn and Twitter.