Citigroup to invest in Ginwa hotel in China

SHANGHAI, Sept 17 (Reuters) - Citigroup's (C.N: Quote, Profile, Research, Stock Buzz) property investment arm plans to invest in a hotel owned by China's Ginwa Enterprise Co (600080.SS: Quote, Profile, Research, Stock Buzz), part of the U.S. investment bank's programme to acquire shopping malls and hotels in China's major cities, Ginwa said on Monday.

Citigroup will soon sign an agreement with Ginwa to invest in its five-star Howard Johnson Ginwa Plaza Hotel, in the northwestern city of Xian, Ginwa said in a statement.

It did not say how big a stake Citigroup was buying or for how much.

In February, Citigroup raised $1.29 billion in its Asia opportunities fund and plans to invest $600 million of the fund in China and $400 million in India.

David Schaefer, Asia head of Citigroup's property investment arm, said in April that the Citigroup fund had already made three investments in Shanghai, including buying a 75 percent stake in the Novel Plaza office building, but was looking at up-and-coming second-tier cities including Xian and Chengdu in the west, as well Tianjin, which neighbours Beijing.

Overseas investors are buying properties in China in expectation that the country's economic boom will boost demand for office buildings and residential properties.

Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) recently bought a 10 percent stake in the Shanghai World Financial Centre, China's tallest building.

The Chinese government last year imposed restrictions on foreign investment to curb overseas speculation and a surge in domestic property prices.