The Real Deal New York

China Vanke agrees to buy 5% stake in Cushman ahead of IPO

Hong Kong investor will pay roughly $174M at current pricing projections
By Rich Bockmann | July 25, 2018 03:05PM

Cushman & Wakefield’s Brett White, 225 West Wacker Drive, and China Vanke’s Zhu Jiusheng (Credit: Hines and Getty Images)

Ahead of its initial public offering, Cushman & Wakefield struck a deal to sell roughly 5 percent of the company’s shares to a unit of China’s largest real estate firm.

Cushman agreed to sell 10.2 million shares in the company through a private placement deal to a unit of China Vanke based in Hong Kong, paperwork filed with the Securities and Exchange Commission Wednesday shows.

Vanke agreed to purchase the shares at whatever price the market sets when Cushman holds its public offering.

Sign up for China Watch for weekly emails on Chinese real estate investments.

The brokerage on Monday set target pricing between $16 and $18 per share, which means Vanke would pay $173.6 million for its stake if the market responds at the midway point of the firm’s projections.

A representative for Cushman could not be immediately reached for comment.

After a long drive toward Wall Street, Cushman is expected to hold its initial offering later this year. The company plans to sell 45 million shares for a total of $765 million at its midway pricing range.

That’s on top of the $173.6 million in shares it plans to sell to Vanke, plus additional shares that underwrites have an option to buy. Much of that capital will be used to pay down the company’s significant debt.

Following the IPO, Cushman’s current owners – TPG Capital, PAG Asia Capital and the Ontario Teachers’ Pension Plan – will hold a little more than 66 percent of the company, according to SEC documents. Investors who buy shares through the offering will hold shy of 22 percent of the company, and existing management holders will own about 7 percent.

China Vanke, meanwhile, was one of the most active Chinese investors during the boom years of Sino investment in New York real estate, but like its counterparts has pulled back amid clampdowns by the Chinese government on overseas investment.

The company is co-developing the luxury condominium project at 100 East 53rd Street with Aby Rosen‘s RFR Holdings, and has partnered with Slate Property Group and Adam America Real Estate on the controversial Rivington House conversion as well as two Brooklyn projects.

The firm appointed Zhu Jiusheng earlier this year as the company’s president and CEO to succeed former president Yu Liang, who had been appointed chairman after company founder Wang Shi stepped down from that role amid a power struggle at the company. Vanke was the third-largest Chinese developer in terms of sales in 2017.