Why CityDev is keeping its enemies closer with 20% stake in mamahome

It still has around 2000 unsold units in China.

For City Development Ltd (CityDev), it would be better off joining its rivals than beating them with its acquisition of 20% stake in China's fast-growing online apartment rental platform, mamahome.

According to the latest report by Jefferies, CityDev's recent maneuver should help in enhancing leasing efforts for group's residential leasing properties and serviced suites.

To recall, the group still has in excess around 2000 unsold units in China.

"The disruptive force of shared accommodation/vacation rental is evident and is a classic case of 'if you can’t beat them, join them'. While we are not yet convinced about long-term cash recurring income stream there can be potential mark to market/realized gains from the purchase," the report noted.

Shanghai Chongfu owns 56% stake in the platform while E-house Capital – the financial services division of real estate services firm E-house China – owns another 24% stake.

The report underscored that beyond investment gains, CityDev's acquisition of the online platform will help the group improve its leasing efforts amidst sluggish property sales in some of the Chinese cities.

Mamahome has more than 100,000 apartment listings, spanning over 20 cities in China. More than 75% of the apartments are located in key gateway cities – Shanghai, Beijing and Guangzhou.

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