Blackstone investing in China housing market

American private equity giant Blackstone Group has entered the booming Chinese housing market, the Financial Times has reported.

Blackstone is backing Hong Kong developer Great Eagle’s construction of over 1,000 luxury homes in the port city of Dalian in northern China. The project will also include 400 hotel rooms and is expected to be built in several stages. Dalian is nicknamed “the Hong Kong of northern China” and is an important business and trading centre.

It is the first significant investment in the Chinese housing market by Blackstone Group, which has a market capitalization of US$3.8 billion. The Financial Times report did not state the amount they invested in the Great Eagle project. The investment by Blackstone comes at a time of unprecedented rise in value in Chinese home prices, leading to property bubble fears and recently implemented government cooling measures.

Analysts saw the deal by Blackstone as being in line with the company’s recent focus on developing economies, especially China and India. The private equity firm has said in the past that China’s rapid growth and low valuations were an opportunity for good returns, with wage growth and urbanisation supporting values.

Both Blackstone Group and Great Eagle were not able to comment on the story, the Financial Times said.