HONG KONG, Sept 25 (Reuters) - The property investment arm of U.S. life insurer Prudential Financial Inc. (PRU.N) is investing in a housing project in the Chinese city of Nanjing, according to its partner in the venture, Hong Kong’s Minmetals Land (0230.HK).
Pramerica Real Estate Investors and Minmetals Land will each invest about 500 million yuan ($73 million) to buy a 98.88 percent equity stake in the project from a subsidiary of the Hong Kong firm, Minmetals said in a statement on Thursday.
Minmetals bought the land for the residential development in an auction in June for 830 million yuan.
Pramerica, which has carved out a reputation for creating joint ventures with property firms with short-term capital deficiencies, had $5.1 billion of assets under management in Asia as of the end of June.
Its biggest allocations in the region are to Singapore, South Korea and Japan, but only 2.3 percent of its Asian assets are in China, according to the firm’s website.
Several foreign funds have been circling Chinese property, hoping for bargains, as government measures to cool the housing markets force local developers to look abroad for capital to finish their projects.
Chinese developers, already squeezed by a land appreciation tax, a clampdown on bank lending and rules requiring more equity in their projects, have now found that capital market turmoil closed off share and debt issuance.
The measures have succeeded in slowing price growth in China’s property market, and in the most overheated cities -- Guangzhou and Shenzhen in the south -- prices have dropped as much as 40 percent in the last year.
Price declines are expected to be more widespread in the coming year as developers slash prices for new apartments to combat falling sales. ($1=6.824 Yuan) (Reporting by Dominic Whiting; Editing by Anshuman Daga)