United States investment bank Morgan Stanley has made its first foray into China's property market, investing US$90 million with three partners to build a luxury residential project in Shanghai.
The move comes despite evidence of a bubble in Shanghai's property market, especially at the top end.
The city government has been trying to stop the market overheating as the Chau Ching-ngai scandal continues to haunt the sector.
Three weeks ago, Morgan Stanley paid HK$842.8 million for Hong Kong office premises in the year's biggest property transaction to date, and the Shanghai deal could signal more regional investments. Morgan Stanley is making the investment via its wholly owned Morgan Stanley Real Estate Fund (MSREF). The group is one of the world's most active real-estate investors, having snapped up US$27.3 billion in the past 12 years.
The Jinlin Tiandi project will include about 90 apartments and 106 serviced apartments, as well as 5,000 square metres for retail and entertainment. The site is in the Luwan district, close to Xintiandi, a popular entertainment district.
Morgan Stanley's partners are Yong Ye Group - a Luwan district-based, government-controlled development company - and two unnamed Singaporean partners. The shareholding and investment breakdown has not been given.