The 470-unit project formerly known as Belvedere All Suites, is due to be launched formally during Chinese New Year and is the first in a series of new Greystar rental accommodation products to eventually provide for a broad range of rental classes.

This includes top-tier to mass market clients.

The US-based real estate fund manager’s Managing Director for China, Charles Ma said Greystar’s maiden China fund is busy repositioning the asset as a high-end rental residential property.

The Belvedere All Suites in Shanghai, China. Photo: Greystar

“The Belvedere will be a flagship asset targeting the upper tier of the rental profile,” said Mr Ma, who indicated that the company will rebrand the project.

“With this as our first, trophy project in Shanghai, we will go on to leverage this to create a brand portfolio that covers a wider market segment with the next two to three institutional-grade high quality assets.”

The multifamily fund, which Greystar established in 2018 as a joint venture with a unit of Australia’s Macquarie Group, reached its first close thanks in part to commitments from Dutch fund managers APG Asset Management NV and Bouwinvest Real Estate Investors nine months ago.

The Belvedere property, which overlooks Zhongshan Park inside Shanghai’s inner ring road, was purchased vacant after the former owners, who had planned to convert the building into luxury condos, backed out following the implementation of regulations barring Chinese citizens from other cities from buying homes until they had paid five years’ worth of city taxes, according to Mr Ma.

Located at the junction of Changning Road and Yuyuan Road, two stations west of Jing An Temple on Shanghai’s metro line 2, the 260-unit building is currently being reconfigured to add a further 210 units across its 36,000 square metres (387,500 square feet) of gross floor area.

Most of the units will be en-suite studios with a kitchen or one bedroom apartments, with a host of amenities available for residents to share including a 300 square metre gym and a 1,500 square metre podium level communal area for private dining and events.

Mr Ma said the property is targeted at the growing number of sophisticated professionals from Shanghai or white-collar workers who have moved to the city from other cities.

"In the 35-plus age range, these people are looking for high quality rental accommodation with the opportunity to connect with like-minded people," said Mr Ma.

The Zhongshan Park property will borrow some features familiar from trendy co-living and co-working operators – such as regular happy hours with free beer on tap, a flexible office area, and a communal lounge with a projector for film nights – but Ma is keen to highlight that Greystar’s venture has some major differences.

“It’s not like co-living where people are forced together – it’s going to be more balanced and will be more suited to a mature audience, as well as being of a very high quality,” said Mr Ma.

"Given that housing prices are not appreciating, people aren’t desperate to buy a home anymore and renting is no longer seen as a temporary solution."

To achieve the right balance between community and privacy, Greystar is investing in what Mr Ma describes as world class facilities within the property, which will even include a pet wash and pet park within 1,000 square metres of grounds, while collaborations with art galleries and pop-up stores will make the communal aspect of the brand more dynamic.

Greystar is stepping into the market as government policy has given a boost to the rental sector, growing the market to the point where 40 percent of the current population in Shanghai is renting, according to Mr Ma.

The growth potential of China’s rental housing market has lured numerous startups into the market.

Just under two weeks ago, Morgan Stanley-backed Qingke, which operates Qingke Apartments, raised $45 million through a NASDAQ IPO.

But the sector’s rapid growth has been offset by a string of companies shutting down or defaulting since the beginning of 2018.

In August of this year, three-year-old rental housing operator Lejia announced that it had “ceased operation, closed down all business, and let go of most of its staff.”

Companies such as Qingke do not own the properties themselves but simply sub-let the units to tenants, while Greystar aims to develop or acquire buildings which it designs and operates for lease to individual tenants.

“Whereas these asset-light operators sometimes sacrifice quality for quantity in the mass market, Greystar will be offering much higher quality through continuous investment as a property owner, with the assets growing in value over time,” said Mr Ma.

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