Morgan Stanley in JV to develop China resort

The firm has joined with Chinese real estate firm Agile Property, investing $772m in their development on Hainan island.

Morgan Stanley has set up a joint venture with Chinese real estate firm Agile Property to develop a large holiday resort project in China’s Hainan province, Agile said in a statement. The total investment in the project is 20 billion yuan ($2.92 billion, €1.86 billion).

The joint venture company will be called Crown Golden Investments. Agile will own 70 percent of Crown through subsidiary Forever Fame , while Morgan Stanley will own 30 percent through its special situations fund, investing 5.3 billion yuan ($772 million) in the venture. The project is located in Sanya city, the Southernmost city on Hainan island, China’s Southernmost point. After Haikou, Sanya is the second most populous city of the island and is a popular tourist destination.

Agile Property was established in 1985 as a furniture maker in Zhongshan City, and entered the property business in 1992. It was listed on the Hong Kong Stock Exchange in December 2005, with Morgan Stanley being the main bookrunner.

Agile said it believed the involvement of Morgan Stanley in Crown would increase public confidence in its projects. It also said proceeds from the deal would help expansion activities to other parts of China. As part of the investment agreement, Forever Fame is paying for all the land costs and the primary infrastructure costs of the first phase and Morgan Stanley has the right of first refusal to participate in the second phase.