Macquarie sells Shanghai property as mkt rebounds-sources

SHANGHAI, July 9 (Reuters) - An investment unit of Australia's biggest investment bank Macquarie Group Ltd (MQG.AX) last week sold a Shanghai luxury residential property that was put on the block more than a year ago, taking advantage of a rebound in China's real estate market.

The 26-storey City Apartments in downtown Shanghai was sold to a small group of Chinese investors for about 300 million yuan ($44 million), according to two people with direct knowledge of the deal. Macquarie bought the property four years ago for about 400 million yuan.

China's housing sales surged 45.3 percent in the first five months as an explosion in new loans stoked demand and investment, enabling Macquarie and other foreign institutions to dispose of their China properties more quickly.

Morgan Stanley (MS.N) has recently sold all the units at its high-end residential project Chateau Pinnacle in downtown Shanghai, local media has reported.

"Many foreign institutions are strained by the global credit squeeze and want to exit some of their China projects due to investment cycle," said Alex Wang, partner at U.S. law firm Paul, Hastings, Janofsky & Walker LLP.

"Meanwhile, local investors, with easier access to borrowing and worried about potential inflation, have emerged as buyers for these properties."

Macquarie, which had been active in China's residential property market for a decade, bought City Apartments in 2005, and put the 16,000 square-metre residential development up for sale early last year as the bank shifts its focus toward commercial properties.

Macquarie had previously negotiated with four other potential buyers, including the real estate arm of Citic Capital, the investment banking unit of China's biggest financial conglomerate Citic Group.

But these talks had collapsed, as the global financial crisis dampened demand and hit China's property market last year. (US$1=6.832 Yuan)