* China developers seeking new capital sources as liquidity
* Private equity seeking deals in China real estate
(Adds Vanke statement in paragraphs 1-2)
By Clare Jim and Stephen Aldred
HONG KONG, Aug 27 Global private equity firm
Carlyle Group is in talks with China Vanke Co Ltd
to acquire some of Vanke's commercial properties
through assets or shares acquisition, the biggest Chinese
property developer said on Thursday.
Vanke is negotiating with the private equity giant's Carlyle
Asia Investment Advisors Ltd and expects to enter a memorandum
of understanding in the next few days, it said in a filing on
the Hong Kong stock exchange. No details of the deal were given.
Vanke's statement cames after two people with knowledge of
the matter told Reuters both parties were in advanced talks on
Carlyle buying stakes in nine of Vanke's shopping malls.
One of the sources said the deal was valued at between 6 and
7 billion yuan ($976 million to $1.14 billion), while the other
said it could be worth up to 10 billion yuan. Both declined to
be named as details of the discussions were private.
A non-binding memorandum of understanding could be signed as
early as Thursday, the people said. The location of the malls
was not disclosed.
Carlyle declined to comment.
The deal would give Carlyle access to China's commercial
real estate market where properties carry yields of around 4.5
to 6 percent. Rental margins of commercial properties are at
around 60-80 percent, higher than the 30-50 percent of
Vanke would also benefit from the deal, which would help it
quickly generate returns as a slump in the residential market,
and a slowing economy, tightens liquidity for Chinese
China Resources Land, another big property
developer, has also said it was looking into financial tools
such as real estate investment trusts and property funds to
"Relying solely on cash contribution from residential
projects is difficult to support a further and faster
development of our commercial projects," China Resources Land
Chairman Xiangdong Wu told a news conference last week.
Private equity firms can provide capital through financing
or structure investment funds with developers, but some
companies have also acquired whole buildings or taken equity
stakes in developers.
Blackstone Group LP in November bought a 40 percent
stake in unlisted Shenzhen-based shopping mall group SCP Co Ltd
for around $400 million.
Shopping malls, however, see slower return on invested
capital than other commercial properties as they depend on
rental income rather than on one-off sales.
($1 = 6.14 Chinese yuan)
(Reporting by Clare Jim and Stephen Aldred; Additional
reporting by Lee Chyen Yee and Bangalore newsroom; Editing by
Anne Marie Roantree, Miral Fahmy and David Evans)