China Life Insurance/GIC $1.4 billion acquisition of minority stake in Joy City

Overview:

• Hong Kong-listed Chinese real estate developer, Joy City Property, has agreed to sell a 49% stake in six mixed-use commercial properties in China to Chinese insurer China Life Insurance and Singapore's GIC for $1.4 billion. 
• The transaction is structured with a new investment fund established to be jointly controlled by Joy City, China Life, and GIC.
• Joy City will retain the remaining 51% in the fund and continue the management of the buildings.
• The deal is expected to close in September 2016.
• Joy City is a real estate development subsidiary of Chinese state-owned food conglomerate COFCO.
• The six projects are located in Beijing, Shanghai and Tianjin.
• The six properties to be controlled through the new fund include Beijing Xidan Joy City, Beijing Chaoyang Joy City, Shanghai Joy City, Tianjin Joy City, Beijing COFCO Plaza, and Beijing COFCO Landmark Tower—formerly known as Beijing Andingmen Joy City—which is still in the early stages of construction.
• Joy City said that it plans to use the sale proceeds for working capital and to repay debt.  
• Davis Polk & Wardwell (Paul Chow) acted for the seller Joy City. 
• Clifford Chance (Tim Wang) advised acquirers China Life Insurance and GIC. 

Wai Yee Tsang - Journalist - Asia-Pacific