Sunsea Parking Industry Group, China's leading car park management company, announced on Tuesday that it raised 1.5 billion yuan ($227.2 million) in its latest round of financing.
The investment that the company has drawn is led by an affiliate of global private equity firm Warburg Pincus. Red Star Macalline, China's largest furniture retail chain, also participated in the financing.
There will be cooperation in the future between Red Star Macalline, which owns 300,000 parking lots in its 200-plus furniture and shopping malls, and Sunsea Parking, said Li Jianhong, executive president of Red Star Macalline on Tuesday.
Sunsea manages about 200,000 parking spaces in 40 Chinese cities, providing services such as parking management, parking lot planning and design.
"The new investment is of huge significance not only to us, but also for the whole industry, which demonstrates the support from leading financial institutions and industry players," said Sunsea Chairman Yan Liang.
"Parking assets will become the next most attractive among real estate assets because they generate steady cash flow and offer the potential of further financing options such as REITs (real estate investment trusts)," Yan added.
Data from the National Development and Reform Commission showed that China has a shortage of more than 50 million parking spaces.
"Private car ownership in China has been growing at more than 10 percent per year but the amount of parking spaces has simply not kept up. For example, the ratio of parking spaces to cars in Beijing is only one-third the level of Hong Kong. Such supply imbalances make this an opportunity to work with China's leading car park operator," said Joseph Gagnon, managing director and head of real estate in Warburg Pincus Asia.
