SouFun, which claims to be China’s leading real estate portal, is taking a $51 million stake in Century 21 China Real Estate, making it a “strategic partner” and the second-largest shareholder in the company.

Century 21 China and SouFun said today they are forming a “mutually preferred strategic partnership” across business lines that includes advertising, e-commerce, listings services, Internet and real estate financing, and secondary and primary brokerage services.

“SouFun’s online strength will facilitate the upgrading of our franchise model, equipping our agents with better tools and systems to provide more integrated services to our customers, and allowing us to further expand the Century 21 China Real Estate franchise network,” said Century 21 China CEO Donald Zhang in a statement.

In its most recent report to investors, Century 21 China recorded a $6.6 million net loss for the quarter ending June 30. Revenue was down 42 percent from a year ago, to $19.8 million, as office closures left 11,800 agents working out of offices in 23 cities, down 13 percent from a year ago.

Chinese authorities last year introduced measures intended to curb real estate speculation, including new capital gains tax regulations, higher down payment ratios, ceilings on new home prices, and limits on investor purchases.

“Market conditions were more challenging than we had expected in the second quarter, with transaction volumes stuck at very low levels,” Zhang said at the time. “In response, we made additional store closures that, while affecting our second-quarter performance, should soften any longer-term impact.”

Century 21 China’s parent company, IFM Investments Ltd., became a public company in January 2010. Its American depositary shares trade on the New York Stock Exchange under the symbol “CTC.” In August, IFM Investments said the New York Stock Exchange had accepted the company’s plan for continued listing on the exchange, giving it 18 months to lift its market capitalization back above the minimum required $50 million.

In July, Century 21 China announced an agreement with the Lending Club of China that’s aimed at funneling cash from investors into home loans. Last month IFM Investments announced that Century 21 China Real Estate subsidiary Shanggu had started advertising listings on Alibaba Group’s Taobao.com, an Amazon.com-like Chinese shopping site.

Today, IFM Investments said Century 21 China Real Estate will issue new shares to SouFun in a private placement for 20 percent of the company’s outstanding share capital, and that Century 21 China will issue a convertible bond to SouFun to support the company’s operational needs. SouFun will also grant a loan to the company’s founders through IFM Overseas Partners.

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