Regions

Nan Fung planned to acquire abount 30% stake in Forterra Trust. The Hong Kong property developer will pay SGD$226.7 million (US$179.5 million) for the Chinese developer. The announcement resulted to an increase in Forterra shares by 29%.

There was also a plan to purchase Forterra's trustee manager and property manager. The deal will be worth SGD17.5 million (US$23.0 million), according to an email statement from Forterra.

"Nan Fung considers Forterra Trust to be an attractive real estate investment vehicle through which to gain further exposure to the China commercial real estate sector," Forterra said. "The additional strength that Nan Fung will bring to the management companies and the trust following the anticipated settlement of these transactions augurs well for Forterra," added Graham Sugden, the company's chairman.

These kind of deals were not new in the country. Larger developers used funds they earned from strong sales to acquire smaller developers. This tactic aimed to build market share.

Last May, Greenland Holdings Group offered to acquire 60% stake in SPG Land Holdings Ltd. for HKD3 billion (US$387 million).