UPDATE 1-Citi, China Resources seek $500 mln for China property
* Citi Private Bank is exclusive distributor of funds
* Funds to invest in shopping malls in smaller China cities (Adds details on funds, quote)
By Saeed Azhar and Kevin Lim
SINGAPORE, Feb 25 (Reuters) - Citigroup's (C.N: Cotización) private bank and conglomerate China Resources Group have launched two real estate funds to invest in Chinese shopping malls and hope to raise about $500 million, two sources with knowledge of the plan said.
The first fund, called CR China Retail Real Estate Income Fund I, will buy existing properties, while the second fund, called CR China Retail Real Estate Development Fund I, will invest in development projects.
Citi confirmed the plan in an email communication, saying its private bank is the exclusive distributor for the funds sponsored by China Resources but did not provide the target size.
"Secondary cities in China are experiencing a boom on the back of rapid urbanisation," said Citi Private Bank's head of real estate investments Quek Kwang Meng.
While many analysts are concerned about a bubble in Chinese stocks and residential property, some say offices and malls, particularly in the smaller cities, remain attractive investments.
In a sign that investors are returning to invest in Asian property, Bank of America (BAC.N: Cotización) recently dropped plans to exit Merrill Lynch's Asia property funds business and will instead help it raise new money, sources have told Reuters. [ID:nTOE60Q060] Continuación...