Singapore sovereign wealth fund GIC Pvt. Ltd. and Shanghai-based property investor and asset manager Nova are teaming up to launch a roughly 4.30 billion-yuan rental apartment platform to invest in prime projects across core sites in China's first-tier cities.

For the launch of the investment vehicle, GIC said it will purchase a minority interest in Nova, which was co-founded by its Chairman Wang Qian and private equity firm Warburg Pincus & Co. in 2015, according to a release.

GIC Real Estate's Chief Investment Officer, Lee Kok Sun, noted that the investment vehicle will target a specific income group containing a large and increasing number of renters facing the issue of limited stock of quality development projects, which are institutionally owned and professionally managed.

The fund's CIO added that the swift growth of China's rental apartment sector, brought about by shifting demographics and preferences for urban living, was another factor leading to their decision to invest in the market.

The deal is slated to close in the third quarter, subject to approvals by relevant regulatory authorities.

As of May 11, US$1 was equivalent to 6.33 yuan.