Investing AbroadAn Irish company is promising a 100 per cent return in three years on an investment deal in China. The €30 million deal is for housing in Huludao, a city in the north-west of the country.
The company promoting the investment is Investors in Asia (IIA). IIA directors include Andrew Paul, formerly of John Paul Construction, Patrick Parsons who is based in Beijing, and Paul O'Driscoll, also based in Beijing and the former MD of the Sino Link Property Company.
IIA is in the final stages of negotiations on a joint venture between a Chinese developer and Dutch investment group Synvest. The development will require €10 million to buy a land bank, with the scheme having an end value of over €30 million.
The developer plans 1,880 homes in Huludao in Liaoning province and will provide €5 million and the Dutch investors €5 million. While the investment will be primarily Dutch-backed, there is room for Irish investors, say IIA. The project is a co-operative effort between the developer, Yinan Ltd, and the local city council. The local government is responsible for investment in schools, hospitals and public amenities, while private enterprise is to deliver private housing, says IIA. The project has the backing of the city administration and the planning department, the company adds.
Paul O'Driscoll is resident in Beijing and will manage the deal locally, while Andrew Paul will oversee the Irish side of the deal. The design team includes architect Bill Brothers, who has operated in China for over 20 years.
IIA has selected DTZ to provide a valuation of the proposed asset to be developed. The target land bank has a value of €10 million and DTZ will provide detailed market and valuation reports, says IIA. A company owned by the developer, but controlled by the investors through a nominee company, will use the €10 million to purchase the site.
It is expected that all of the residential units will be sold within two years of the investment. For this reason IIA claims that the 100 per cent return will come after just three years, net of tax. The investment will be tax structured by PricewaterhouseCoopers.
